Bandhan Bank, Hindustan Aeronautics to launch IPOs next week
By Reuters | Published: 08th March 2018 10:57 PM |
MUMBAI: Bandhan Bank Ltd will look to raise up to 44.7 billion rupees ($687 million) when it launches an initial public offering next week, in what is likely to be the biggest market debut ever by an Indian bank.
State-run military aircraft maker Hindustan Aeronautics is also set to launch its IPO next week, which could net the government as much as 42.3 billion rupees, according to a prospectus seen by Reuters on Thursday.
After a record $11 billion was raised from Indian IPOs last year, bankers had expected another strong showing in 2018 with several companies lining up share sales.
Major Indian stock indexes have tumbled more than 8 percent after hitting record highs in January, however, worrying some market participants.
Banks, in particular, have been hit in recent weeks by worries over rising bad loan provisions and a sprawling $2 billion fraud at state-run Punjab National Bank.
Kolkata-based Bandhan Bank will with two shareholders sell up to 119.3 million shares, or about 10 percent of its post-issue share capital, in the IPO and is confident of strong interest despite the market fall, bankers involved in the sale said.
Its optimism on the IPO, which begins on March 15 and closes on March 19, is based on strong fundamentals for financial services companies in a country where millions of people still do not have a bank account. Bandhan counts Singapore state investor GIC among its investors and its high margins and relatively low bad loan ratio should also draw investors, bankers said.
Bandhan, formerly a microfinance company specialising in small-value loans, and IDFC Bank were the only two companies to win bank permits from the Reserve Bank of India in 2014, the first new bank licensing process in a decade.
The bank started operations in August 2015.
Bandhan shares are being sold in a range of 370 rupees to 375 rupees each. The bank will sell up to 97.7 million new shares, while its shareholders International Finance Corp, part of the World Bank, and IFC FIG will sell up to 21.6 million shares.
The Indian government, which owns Hindustan Aeronautics, is selling 34.1 million shares, or about a 10 percent stake, in its IPO which will take subscriptions from March 16 to March 20, according to the prospectus.
The shares will be sold in a price range of 1,215-1,240 rupees each, a source with direct knowledge told Reuters.
The offering will add to the government's revenues from asset sales which have already reached a record 927 billion rupees so far this fiscal year ending in March.
In another IPO of state-run guided weapon systems maker Bharat Dynamics that runs March 13-15, the government is seeking to raise 9.6 billion rupees.
Axis Capital, Goldman Sachs, JM Financial, JPMorgan and Kotak Mahindra Capital are the banks managing the Bandhan Bank IPO. Axis Capital and SBI Capital Markets are the bankers for the Hindustan Aeronautics share offering.