Bandhan Bank promoter Bandhan Financial Holdings is divesting its shares worth $1.4bn (INR$105bn) through a block deal.
Bandhan Financial Holdings, which holds a 60.95% stake in the bank, is selling 337 million equity shares of INR10 each, representing a 20.95% stake through the share sale.
The transaction will allow the bank to be fully compliant with the Reserve Bank of India (RBI) issued ‘Guidelines for Licensing of New Banks in the Private Sector’ and licensing conditions.
As per the RBI norms, the promoter company is required to bring its holding to 40% of the bank’s paid up voting equity capital within three years.
Bandhan’s three-year deadline ended in September 2018. The central bank had imposed restrictions on expansion of branch network and CEO remuneration post the period.
The shareholding of Bandhan Financial Holdings in the bank reduced from 82.26% to 60.96%following the amalgamation of GRUH Finance in October 2019.
With this deal, the bank has now complied with all the licensing conditions.
Bandhan Financial Holdings is advised on the share sale by Investment banks Credit Suisse, JP Morgan, Goldman Sachs and JM Financial.
In April, Singapore’s sovereign wealth fund GIC increased its stake in India-based private sector lender Bandhan Bank from 3.39% to 4.49%.
In March, the bank opened three new branches and 122 banking outlets in the form of small-format units across 15 Indian states.