Bandhan IPO Review

About the Company:


Bandhan Bank is a commercial bank focused on serving underbanked and underpenetrated markets in India. They have a banking license that


permits them to provide banking services pan-India across customer segments.


Company was incorporated on 23 December 2014 and began operations on August 23, 2015 when Bandhan Financial Services Limited (“BFSL”), Their ultimate parent company, transferred its entire microfinance business to them and they simultaneously commenced general banking activities.


They currently offer a variety of asset and liability products and services designed for micro banking and general banking, as well as other banking products and services to generate non-interest income.


Company’s strength lies in microfinance, including a network of 2,022 doorstep service centres (“DSCs”) and 6.77 million micro loan customers. Currently they have grown to 2,546 DSCs and 9.47 million micro loan customers as of September 30, 2017.

Company had launched their general banking business on August 23, 2015 by opening a greenfield network of 501 bank branches and 50 automated teller machines (“ATMs”), which as of September 30, 2017 they have grown to 864 bank branches and 386 ATMs, together serving over 1.87 million general banking customers.

Company’s distribution network is particularly strong in East and Northeast India, with West Bengal, Assam and Bihar together accounting for 57.75% and 58.13% of their branches and DSCs, respectively, though the focus is to expand across India.


Future Growth Strategies to be Implemented by the Company:


Maintain focus on micro lending while expanding further into other retail and SME Lending:


As India’s largest micro lender in terms of overall advances, Company’s aim is to maintain their leading position in the micro lending space while expanding further into other retail and SME lending in order to capitalise on growth opportunities in India’s micro lending and banking industries.


To Expand Geographical Footprint:

Company’s strategy is to increasingly diversify their geographical footprint. Accordingly, they have increased their footprint to 33 State and Union Territories from 24 State and Union Territories since they began banking operations.


Targeting New Products & Customers:
In addition to expanding their branch network, they also have plans to develop products and services designed for rural and urban mass retail customers, as well as by continuing to actively promote our accounts and deposits, and by offering attractive interest rates.
For example, recently they had launched additional products and services designed for non-resident Indians (“NRIs”) and foreign currency remittances, in order to increase their business with the large Indian diaspora.
Moreover, Company believes that their broad micro banking platform provides them with opportunities to receive deposits from relatively underbanked and unbanked segments of Indian society as they become increasingly affluent over time.

Boost share of Non-Interest Income:
Company intends to complement income from core asset products with non-interest income from other sources in order to diversify their income stream and improve the profit margins.
Additionally, in 2017 they entered into arrangements to begin distributing third-party insurance products and third-party mutual funds, in return for which they receive a commission based upon the value of insurance product or mutual fund sold.
Company will also commence distribution of life insurance products as a corporate agent in December 2017, for which they have received a license from IRDAI.
As they expand their network,they expect to increase the size of their PSL-compliant loan portfolio as well as grow the distribution of third party products, thereby increasing their income stream from both sources.


Company has also commenced inward and outward foreign currency remittances. The service is made available to non-resident Indians (“NRI”) and resident Indian customers within defined regulatory guidelines. These remittance services will provide a further stream of non-interest income for us.


Did You Know? Bandhan Bank is the largest player in the Micro-Finance space:

Bandhan Bank has the largest overall gross micro-banking asset portfolio, with Rs.21,380 crores as of March 2017, (also counting gross advances, which includes IBPC/Assignment, in the microfinance segment).Amongst the banks (private as well as public), the outstanding loans given by Bandhan Bank is more than three times higher than its closest competitor, the State Bank of India.

Positives for the Company:Experienced and professional team, backed by strong independent board.Operating Model Focused on Serving Underbanked and Underpenetrated Markets.Consistent Track Record of Growing a Quality Asset and Liability Franchise.Extensive, Low Cost Distribution Network.Consistent Financial Performance and Robust Capital

Topper in the Field of MSME loans Sector ..

Expected Listing gain : 10-13%

Suggestion : Subscribe (4X valuation is Bit too High But Still Can beat the Market in an Long run)

Disclaimer :  Only for Educational purpose Only Will not be responsible any related time profits or losses.Do consult your financial advisor before investing


Team Trading CA


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