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Bandhan Bank may delay its initial public offering (IPO), subject to clearances from the Reserve Bank of India (RBI). Norms mandate Bandhan to opt for an IPO within three years of starting operations (within 2018).
Chandra Shekhar Ghosh, Founder, MD and CEO, is not very comfortable listing the entity within the stipulated three years.
“If given an option, we would like to delay the IPO. The call (for floating an IPO) will come depending on the business growth,” he told BusinessLine .
Ghosh has a point. With on-tap bank licensing set to be introduced, the new entrants coming into the banking sector through this channel will have a six-year time-frame for floating an IPO. He wants a level-playing field for entities like Bandhan.
“Yes, Bandhan too would like to have a level-playing field. We would like to approach the RBI, but not immediately though,” he added.
At least six years is a preferred time-frame for Bandhan.
Increase in deposit base and a good capital adequacy ratio also do not make listing an attractive option now.
Bandhan closed FY16 (till March 31, 2016) with a net interest income of nearly ₹933 crore while it mobilised deposits to the tune of nearly ₹12,089 crore. Total advances stood at nearly ₹15,494 crore. The gross non-performing asset ratio (as a per cent of total advances) stood at 0.15 per cent.
Deposit TargetInterestingly, Bandhan has already completed its deposit mobilisation target for the fiscal.
The bank had targeted a 30 per cent growth in deposits, to around ₹15,500 crore. However, as of date its deposit base stands at ₹16,000 crore (or ₹500 crore more than the target). “We had targeted a 30 per cent growth in deposits for FY17. And the target has been fulfilled already,” Ghosh added.
Retail lendingMeanwhile, Bandhan is also looking to increase its retail lending portfolio.
It recently introduced loans targeting entrepreneurs and small and medium enterprises, with ticket size of between ₹1 lakh and ₹10 lakh.
The new product will also enable existing micro-credit customers to go for loans of over ₹1 lakh at interest rates lower than those of MFIs. Other retail loans are primarily personal, property and home loans. Micro credit still accounts for much of the bank’s disbursal.
Of the ₹16,500-crore loan book (as on date), non-micro credit accounts for only ₹500 crore.
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