logo |

News

    Home   >     Industry    >     Main body

    BlackRock, Three Others Buy $1.4 Billion of Bandhan Bank Shares

    Abstract:BlackRock Inc. and Singapore‘s GIC Pte. bought shares in Bandhan Bank Ltd. as the main shareholder of India’s most profitable bank sold 106 billion rupees ($1.4 billion) of its stake to meet the regulators ownership rules.

      BlackRock Inc. and Singapore‘s GIC Pte. bought shares in Bandhan Bank Ltd. as the main shareholder of India’s most profitable bank sold 106 billion rupees ($1.4 billion) of its stake to meet the regulators ownership rules.

      Temasek Holdings Pte and SBI Mutual Fund also bought shares, the bank‘s founder and Chief Executive Officer Chandra Shekhar Ghosh said in an interview on Monday. GIC got the Reserve Bank of India’s approval to raise its stake in the lender to 10% from 4.9%, he said.

      Bandhan Financial Holdings Ltd. sold 337.4 million shares in the Indian lender at 313.1 rupees in a block trade on Monday, lowering its stake to 40%. The sale took place at a 9.3% discount to the previous closing price, according to deal terms seen by Bloomberg News.

      Bandhan Banks shares plunged 10.5% in Mumbai on Monday after the transaction, its biggest loss since March 30. They were up as much as 2% on Tuesday.

      The central bank had restricted branch expansion by Bandhan Bank, which specializes in lending to small borrowers, after the founding firm failed to lower its stake to the target 40% last year. Bandhan Bank then agreed to combine with mortgage financier Gruh Finance Ltd. in a $11.7 billion deal to pare the founders stake as mandated, following which the central bank partially relaxed its curbs on the lender.

      Read more about rival Kotak Mahindras feud with RBI

      “RBI is very clear that shareholding in private banks should be diversified as it reduces concentration risk,” said Karthik Srinivasan, group head for financial sector ratings at ICRA Ltd., the local arm of Moodys Investors Service. “The urgency of stake sale by Bandhan founders shows that RBI is on track on its rules regarding shareholding in private banks.”

      After the latest sale, Bandhan Financial will need to lower its stake in the bank to 20% by August 2023, Ghosh said, citing RBI rules. He said his personal stake in the holding company is 2%, with the rest held by GIC, International Finance Corp. and others.

      The holding company aims to use the proceeds to start new ventures in areas such as insurance and asset management, subject to RBIs approval, Ghosh said.

      The central bank is currently reviewing its norms on shareholding in private banks, which stipulate founders cut their stake to 15% eventually, as part of its efforts to improve corporate governance.

      Some of Bandhan Banks profitability metrics, including return on assets and return on equity, are the highest among Indian banks.

      Credit Suisse Securities (India) Pvt., JPMorgan India Pvt., Goldman Sachs (India) Securities Pvt. and JM Financial Institutional Securities Ltd. are joint bookrunners for the deal.

      (Updates with Ghoshs stake in Bandhan Financial in seventh paragraph)

    Latest News

    United Arab Emirates Dirham

    • United Arab Emirates Dirham
    • Australia Dollar
    • Canadian Dollar
    • Swiss Franc
    • Chinese Yuan
    • Danish Krone
    • Euro
    • British Pound
    • Hong Kong Dollar
    • Hungarian Forint
    • Japanese Yen
    • South Korean Won
    • Mexican Peso
    • Malaysian Ringgit
    • Norwegian Krone
    • New Zealand Dollar
    • Polish Zloty
    • Russian Ruble
    • Saudi Arabian Riyal
    • Swedish Krona
    • Singapore Dollar
    • Thai Baht
    • Turkish Lira
    • United States Dollar
    • South African Rand

    United States Dollar

    • United Arab Emirates Dirham
    • Australia Dollar
    • Canadian Dollar
    • Swiss Franc
    • Chinese Yuan
    • Danish Krone
    • Euro
    • British Pound
    • Hong Kong Dollar
    • Hungarian Forint
    • Japanese Yen
    • South Korean Won
    • Mexican Peso
    • Malaysian Ringgit
    • Norwegian Krone
    • New Zealand Dollar
    • Polish Zloty
    • Russian Ruble
    • Saudi Arabian Riyal
    • Swedish Krona
    • Singapore Dollar
    • Thai Baht
    • Turkish Lira
    • United States Dollar
    • South African Rand
    Current Rate  :
    --
    Amount
    United Arab Emirates Dirham
    Available
    -- United States Dollar
    Risk Warning

    The Database of WikiFX comes from the official regulatory authorities , such as the FCA, ASIC, etc. The published content is also based on fairness, objectivity and fact. WikiFX doesn't ask for PR fees, advertising fees, ranking fees, data cleaning fees and other illogical fees. WikiFX will do its utmost to maintain the consistency and synchronization of database with authoritative data sources such as regulatory authorities, but does not guarantee the data to be up to date consistently.

    Given the complexity of forex industry, some brokers are issued legal licenses by cheating regulation institutes. If the data published by WikiFX are not in accordance with the fact, please click "Complaints "and "Correction" to inform us. We will check immediately and release the results.

    Foreign exchange, precious metals and over-the-counter (OTC) contracts are leveraged products, which have high risks and may lead to losses of your investment principal. Please invest rationally.

    Special Note, the content of the Wikifx site is for information purposes only and should not be construed as investment advice. The Forex broker is chosen by the client. The client understands and takes into account all risks arising with Forex trading is not relevant with WikiFX, the client should bear full responsibility for their consequences.