Bandhan Financial looks to give long-term investors an exit

Synopsis

Bandhan Financial Services is looking at ways for its investors to exit. The company has hired an investment banker to explore options. This move aligns with regulatory requirements for Bandhan Bank. The promoter's stake needs to be reduced. Options include selling shares to private equity funds or an initial public offer. The company's performance is improving.

Kolkata: Bandhan Financial Services, the promoter of Bandhan Bank, is exploring exit options for its long-term investors, such as GIC Ventures and International Finance Corp (IFC), multiple people aware of the development told ET.

The company is said to have engaged global investment banker Jefferies to gauge investors' interest, especially from private equity funds. The Bandhan Financial board discussed this issue at its meeting on Monday, two people aware of the deliberations told ET.

The exercise also aligns with the regulatory mandate that requires Bandhan Financial to bring down the promoter's stake in the operating bank to 26% by 2030.

Agencies

Bank promoter to explore pvt stake sale or go for ipo

"The promoter holds a little below 40% now and it may think of a phased reduction," a person close to the bank said.

The board discussed two possible routes for investors to exit. First, selling shares of existing investors to private equity funds and second, floating an initial public offer, people familiar with the matter said.

The members discussed that a sale to private equity investors could fetch higher valuation for Bandhan Financial Services, which owns 39.74% in Bandhan Bank, and has an asset management company, a life insurance company and a technology company under its fold.

Caladium Investment Pte, which is an investment vehicle for GIC Ventures, held 16.7% in BFSL while IFC owned 13.6% as on March 31, 2025. Local development finance institution Small Industries Development Bank of India (Sidbi) held 8.1% in it. Financial Inclusion Trust and North East Financial Inclusion Trust together owned 40.7% while Bandhan Employees' Welfare Trust held 14.6% at the same time.

The beginning of the sale exercise coincides with the recovery of Bandhan Bank's business performance in the microfinance vertical, which was under severe asset quality stress over the past two years.

BFSL's net profit for the nine-month period is likely to be around ₹285 crore, significantly higher than FY25's ₹104 crore, people aware said.

The board is said to have suggested a June deadline for the private stake sale. If it does not happen by that time, the focus will shift fully to IPO.

Bandhan Financial Services Ltd (BFSL) chairman Chandra Shekhar Ghosh did not respond to ET queries.

IFC has remained invested in BFSL since 2011 while GIC invested in it in 2015 to help the transition of Bandhan Bank from a microfinance company. At present BFSL's sole business is managing investment. It owns 100% in Bandhan Financial Holdings, which was created in 2013 as the non-operating financial holding company in compliance with the Reserve Bank of India's private bank licensing guidelines.

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