On Monday (3rd August), BFHL, the holding company of Bandhan Bank, sold a 20.95% stake worth over Rs 10,550 crore as a part of complying with the regulatory requirements.
More than 33.73 crore shares have been offloaded by the Bandhan Financial Holdings Ltd (BFHL) in the secondary market.
BFHL is a Non-Operative Financial Holding Company (NOFHC) of the lender. It was required to reduce the excess shareholding to 40% of the paid-up voting capital of the bank.
The bank, in a filing to the stock exchange, said that in order to fully comply with the Licensing Guidelines, the NOFHC had informed the bank on 3rd August 2020 that it has diluted that its excess shareholding of 20.95% i.e., 33, 73, 67, 189 equity shares of Rs 10 each fully paid-up in the bank through secondary market sales.
The filing further said that the transaction, the shareholding of NOFHC in the bank has been reduced to 40% of the total paid-up voting capital of the bank and is in compliance with the guidelines and licensing conditions of the bank.
Chandra Shekhar Ghosh, MD, and CEO of Bandhan Bank told PTI that the shares were sold at an average price of Rs 313.35. The investors include GIC Singapore, Temasek, and BlackRock.
The stake is worth a little over Rs 10,571 crore based on the average price.
BFHL’s shareholding in the bank came down from 82.26% to 60.96% after the merger of GRUH Finance Ltd with the bank effective from 17th October 2019 and issuance of fresh equity shares to shareholders of GRUH on 21st October 2019.
After the transaction on Monday (3rd August), BFHL’s stake has come down to 40%.
Options are being explored to bring down the stake to the prescribed 40% limit to meet the regulator's guidelines, as stated by the lender in its latest annual report.
Bandhan Bank commenced operations as a universal bank in August 2015. Reserve Bank of India had imposed a monetary fine of Rs 1 crore on the bank last October on failing to bring down the stake of the holding company to the prescribed level within a stipulated time frame.
Bandhan Financial Services Ltd (BFSL) is the parent of BFHL.
Small Industries Development Bank of India (SIDBI) holds about 8% in BFSL. International Finance Corporation, FIG Investment, and Caladium Investment Pte (an affiliate of Singapore’s GIC) are among the investors of the BFSL.
On Monday (3rd August), shares of the bank slipped more than 10% to close at Rs 308.65 on BSE.