Bandhan Bank IPO subscribed 14.6 times

Bandhan Bank’s initial public offering (IPO) was subscribed 14 times. The offering generated demand worth ~245 billion against shares worth ~31 billion on offer.

Bandhan Bank’s initial public offering (IPO), one of the biggest by a domestic bank, was oversubscribed 14 times. Despite weak secondary market conditions, the offering generated ~245 billion against shares worth ~31 billion on offer. The Kolkata-based lender had already raised ~13.4 billion for its ~45-billion IPO from anchor investors. Bulk of the demand in the IPO came from institutional investors. The qualified institutional buyer (QIB) portion of the issue was subscribed 39 times. The high-networth individual (HNI) quota was subscribed 14 times, with most of the bids in the segment coming from ‘corporates’. The retail portion, however, failed to garner much demand with the portion seeing just 1.2 times subscription.

The IPO comprised fresh fund-raising worth ~37 billion and secondary share sale worth ~8 billion by the International Finance Corporation (IFC), an investment arm of the World Bank. The price band for the IPO was fixed at ~370 to ~375 per share. At the top end of the price band, Bandhan Bank will be valued at nearly ~450 billion, making it the eight most valuable bank in the country. Despite the lender asking for steep valuations compared to other private sector peers, the demand was huge. At the top end of the price band, Bandhan Bank is valued at more than four times its price-to-book ratio.