{"id":11853,"date":"2020-08-03T21:39:00","date_gmt":"2020-08-03T21:39:00","guid":{"rendered":"https:\/\/bengalnewstimes.com\/?p=11853"},"modified":"2020-08-03T21:39:00","modified_gmt":"2020-08-03T21:39:00","slug":"ownership-rules-promoter-dilutes-20-95-stake-in-bandhan-bank","status":"publish","type":"post","link":"https:\/\/bengalnewstimes.com\/?p=11853","title":{"rendered":"Ownership rules: Promoter dilutes 20.95% stake in Bandhan Bank"},"content":{"rendered":"<p><\/p>\n<div>\n<div class=\"article-image\">\n<figure><img loading=\"lazy\" decoding=\"async\" class=\"lazy lazy-hidden size-full wp-image-2043845\" data-lazy-type=\"image\" src=\"https:\/\/images.financialexpress.com\/2020\/08\/1-81.jpg\" alt=\"Notably, on last Friday, Bandhan Bank's scrip on BSE closed 2.11% higher at Rs 345.25.\" width=\"660\" height=\"440\" srcset=\"\" sizes=\"auto, (max-width: 660px) 100vw, 660px\"\/><noscript><img loading=\"lazy\" decoding=\"async\" class=\"lazy lazy-hidden size-full wp-image-2043845\" data-lazy-type=\"image\" src=\"https:\/\/images.financialexpress.com\/2020\/08\/1-81.jpg\" alt=\"Notably, on last Friday, Bandhan Bank's scrip on BSE closed 2.11% higher at Rs 345.25.\" width=\"660\" height=\"440\" srcset=\"\" sizes=\"auto, (max-width: 660px) 100vw, 660px\"\/><noscript><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-2043845\" src=\"https:\/\/images.financialexpress.com\/2020\/08\/1-81.jpg\" alt=\"Notably, on last Friday, Bandhan Bank's scrip on BSE closed 2.11% higher at Rs 345.25.\" width=\"660\" height=\"440\" srcset=\"https:\/\/images.financialexpress.com\/2020\/08\/1-81.jpg 660w, https:\/\/images.financialexpress.com\/2020\/08\/1-81-300x200.jpg 300w, https:\/\/images.financialexpress.com\/2020\/08\/1-81-620x413.jpg 620w, https:\/\/images.financialexpress.com\/2020\/08\/1-81-401x267.jpg 401w, https:\/\/images.financialexpress.com\/2020\/08\/1-81-440x293.jpg 440w, https:\/\/images.financialexpress.com\/2020\/08\/1-81-80x54.jpg 80w, https:\/\/images.financialexpress.com\/2020\/08\/1-81-313x209.jpg 313w\" sizes=\"auto, (max-width: 660px) 100vw, 660px\"\/><\/noscript><\/noscript><span class=\"article-caption\">Notably, on last Friday, <a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/bandhan-bank-ltd-stock-price\/\" rel=\"noopener noreferrer\">Bandhan Bank<\/a>\u2019s scrip on BSE closed 2.11% higher at Rs 345.25.<\/span><\/figure>\n<\/div>\n<p>Private sector lender Bandhan Bank on Monday said Bandhan Financial Holdings (BFHL), its holding company, has diluted 20.95% or 33,73,67,189 equity shares in the bank in order to bring its shareholding to 40% through secondary market sale to comply with licensing conditions of the Reserve Bank of India (<a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/tag\/rbi\/\" rel=\"noopener noreferrer\">RBI<\/a>).<\/p>\n<p>The bank\u2019s founder raised Rs 10,600 crore selling stakes to at least four investors, including BlackRock and Singapore\u2019s GIC, CEO Chandra Shekhar Ghosh said, reported Bloomberg. The bank also sold stakes to Temasek and <a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/state-bank-of-india-stock-price\/\" rel=\"noopener noreferrer\">SBI<\/a> Mutual Fund, Ghosh told the agency.<\/p>\n<p>GIC has got the RBI\u2019s approval to increase its stake to 10% in the lender, Ghosh said. BFHL may use the proceeds to start an insurance and mutual funds unit, he said.<\/p>\n<p>In a filing, the Kolkata-based lender said, \u201cIn order to be fully compliant with the licensing guidelines, the NOFHC (BFHL) today informed the bank that it has diluted 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 sale.\u201d<\/p>\n<p>Consequent to this shares transaction, the shareholding of NOFHC (Non-Operative Financial Holding Company) in the bank was reduced to 40% of the total paid-up voting equity capital of the bank, the filing further said. Promoter holding of BFHL in Bandhan Bank had stood at 60.95% at the end of the first quarter this fiscal.<\/p>\n<p>Talking to FE, the bank\u2019s managing director and CEO Chandra Shekhar Ghosh said the shares were sold at 313.35 a piece.<\/p>\n<p>Notably, on last Friday, Bandhan Bank\u2019s scrip on BSE closed 2.11% higher at Rs 345.25.<\/p>\n<p>Asked was it the right time to sell shares in a block trade, Ghosh said, \u201cThere is no right time for compliance (meeting RBI\u2019s guidelines).<\/p>\n<p>On the shares were sold at around 9% discount, he said, \u201cThis is the normal nature of the business. We are not worried about that.\u201d<\/p>\n<p>Asked what will Bandhan Financial Holdings (BFHL) do with the sum of money it has got from the share sale, Ghosh said, \u201cI cannot say on behalf of it. It can venture into insurance and mutual fund business with this fund. I can say that BFHL has such an option as an NOFHC.\u201d<\/p>\n<p>\u201cWe have already informed the RBI on the promoter holding dilution exercise carried out by BFH,\u201d Ghosh added.<\/p>\n<p>Earlier, the acquisition of affordable housing finance company <a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/gruh-finance-ltd-stock-price\/\" rel=\"noopener noreferrer\">Gruh Finance<\/a> had brought down promoter holding of Bandhan Financial Holdings in Bandhan Bank to around 60.95% from 82.26%. Gruh Finance formally merged with Bandhan Bank on October 17, 2019 in accordance with the amalgamation scheme. Formerly, India\u2019s largest mortgage lender HDFC Ltd was the promoter of Ahmedabad-based Gruh.<\/p>\n<p>Coming down heavily on Bandhan Bank for not being able to bring down the promoter holding to 40% in three years\u2019 time, the Reserve Bank of India on September, 2018 had barred the bank from opening new branches and also frozen the remuneration of its MD and CEO Chandra Shekhar Ghosh at the existing level.<\/p>\n<p>However, giving a breather to the bank, RBI lifted the regulatory restriction on its branch opening in February 2020, subject to some conditions, although the bank was not then in compliance with the licensing condition on dilution of promoter holding.<\/p>\n<p>According to RBI\u2019s new banking licensing norms, any bank offering \u2018universal\u2019 services will have to bring down the promoter holding to 40% in three years from the date of commencement of business. Bandhan Bank started operations as a universal bank on August 23, 2015. It became the first microfinance company in India to get a universal banking licence.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"lazy lazy-hidden alignnone size-full wp-image-2043861\" data-lazy-type=\"image\" src=\"https:\/\/images.financialexpress.com\/2020\/08\/1-83.jpg\" alt=\"\" width=\"660\" height=\"440\" srcset=\"\" sizes=\"auto, (max-width: 660px) 100vw, 660px\"\/><\/p>\n<p><noscript><img loading=\"lazy\" decoding=\"async\" class=\"lazy lazy-hidden alignnone size-full wp-image-2043861\" data-lazy-type=\"image\" src=\"https:\/\/images.financialexpress.com\/2020\/08\/1-83.jpg\" alt=\"\" width=\"660\" height=\"440\" srcset=\"\" sizes=\"auto, (max-width: 660px) 100vw, 660px\"\/><noscript><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-2043861\" src=\"https:\/\/images.financialexpress.com\/2020\/08\/1-83.jpg\" alt=\"\" width=\"660\" height=\"440\" srcset=\"https:\/\/images.financialexpress.com\/2020\/08\/1-83.jpg 660w, https:\/\/images.financialexpress.com\/2020\/08\/1-83-300x200.jpg 300w, https:\/\/images.financialexpress.com\/2020\/08\/1-83-620x413.jpg 620w, https:\/\/images.financialexpress.com\/2020\/08\/1-83-401x267.jpg 401w, https:\/\/images.financialexpress.com\/2020\/08\/1-83-440x293.jpg 440w, https:\/\/images.financialexpress.com\/2020\/08\/1-83-80x54.jpg 80w, https:\/\/images.financialexpress.com\/2020\/08\/1-83-313x209.jpg 313w\" sizes=\"auto, (max-width: 660px) 100vw, 660px\"\/><\/noscript><\/noscript><\/p>\n<p>Notably, there is a three layered structure for Bandhan Bank. Bandhan Financial Services Limited is the holding company of Bandhan Financial Holdings Limited (Non Operative Financial Holding Company) which is the holding company of the Bandhan Bank. Bandhan Financial Holdings, which is the promoter of Bandhan Bank. Before IPO, the promoter holding in the bank was nearly 89%. Bandhan had launched a successful IPO in March, 2018.<\/p>\n<p>The bank had received consent from BSE and <a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/national-stock-exchange-of-india-ltd-stock-price\/\" rel=\"noopener noreferrer\">National Stock Exchange of India<\/a> for listing and trading of its equity shares with effect from March 27, 2018.<\/p>\n<p>The bank reported a 31.58% year-on-year (y-o-y) fall in its net profit to Rs 549.82 crore in the first quarter this fiscal, on the back of Rs 750 crore Covid-19 related provisions on standard assets.<\/p>\n<p>\u201cThere were multiple ways in which the promoter holding in Bandhan Bank could have been reduced. Either you sell stake or you raise capital in the bank or you do some mergers and acquisitions (M&amp;A) activities. The promoter exercised the secondary market sale route this time to reduce stake after the M&amp;A activity in the past, when Bandhan Bank acquired Gruh Finance last year. One needs to look at this in terms of the compliance with the regulatory instructions. So, they have taken this call as it enables them to do so faster,\u201d Karthik Srinivasan, group head, financial sector ratings at ICRA told, told FE.<\/p>\n<p>On Monday, Bandhan Bank\u2019s scrip on BSE closed 10.60% lower at Rs 308.65.<\/p>\n<div class=\"common-bottom-text\">\n<p>Get live <a href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/\" target=\"_blank\" rel=\"noopener noreferrer\">Stock Prices<\/a> from <a href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/s-p-bse-sensex-stock-price\/\" target=\"_blank\" rel=\"noopener noreferrer\">BSE<\/a>, <a href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/nifty-50-stock-price\/\" target=\"_blank\" rel=\"noopener noreferrer\">NSE<\/a>, <a href=\"https:\/\/www.financialexpress.com\/investing-abroad\/\" target=\"_blank\" rel=\"noopener noreferrer\">US Market<\/a> and latest NAV, portfolio of <a href=\"https:\/\/www.financialexpress.com\/mutual-funds-india\/\" target=\"_blank\" rel=\"noopener noreferrer\">Mutual Funds<\/a>, calculate your tax by <a href=\"https:\/\/www.financialexpress.com\/income-tax-calculator\/\" target=\"_blank\" rel=\"noopener noreferrer\">Income Tax Calculator<\/a>, know market\u2019s <a href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/nse-top-gainers\/\" target=\"_blank\" rel=\"noopener noreferrer\">Top Gainers<\/a>, <a href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/nse-top-losers\/\" target=\"_blank\" rel=\"noopener noreferrer\">Top Losers<\/a> &amp; <a href=\"https:\/\/www.financialexpress.com\/mutual-funds-india\/equity-funds\/\" target=\"_blank\" rel=\"noopener noreferrer\">Best Equity Funds<\/a>. Like us on <a href=\"https:\/\/www.facebook.com\/thefinancialexpress\" target=\"_blank\" rel=\"noopener noreferrer\">Facebook<\/a> and follow us on <a href=\"https:\/\/twitter.com\/FinancialXpress\" target=\"_blank\" rel=\"noopener noreferrer\">Twitter<\/a>.<\/p>\n<p class=\"telegram-text\"><img loading=\"lazy\" decoding=\"async\" class=\"telegrma_img\" src=\"https:\/\/images.financialexpress.com\/2020\/04\/telegram.png\" alt=\"\" width=\"24\" height=\"24\" style=\"margin: 0px 5px 4px 0px; float: left;\"\/>Financial Express is now on Telegram. <a href=\"https:\/\/t.me\/TheFinancialExpressOnline\" target=\"_blank\" rel=\"noopener noreferrer\">Click here to join our channel<\/a> and stay updated with the latest Biz news and updates.<\/p>\n<\/div>\n<\/div>\n<p><script async src=\"\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><br \/>\n<br \/><a href=\\\"https:\/\/www.financialexpress.com\/industry\/banking-finance\/ownership-rules-promoter-dilutes-20-95-stake-in-bandhan-bank\/2043843\/\\\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Notably, on last Friday, Bandhan Bank\u2019s scrip on BSE closed 2.11% higher at Rs 345.25. Private sector lender Bandhan Bank on Monday said Bandhan Financial Holdings (BFHL), its holding company, has diluted 20.95% or 33,73,67,189 equity shares in the bank in order to bring its shareholding to 40% through secondary [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":11854,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":""},"categories":[36],"tags":[],"class_list":["post-11853","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking-business"],"jetpack_featured_media_url":"https:\/\/bengalnewstimes.com\/wp-content\/uploads\/2020\/08\/1-81.jpg","_links":{"self":[{"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/posts\/11853","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11853"}],"version-history":[{"count":0,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/posts\/11853\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/media\/11854"}],"wp:attachment":[{"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11853"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11853"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11853"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}