Bandhan’s bumper debut makes it India’s 8th most valued bank

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Mumbai: Bandhan Bank shares made a strong debut on the stock markets on Tuesday, finishing at 27.25 percent, higher at Rs 477.20 on the BSE. The bank was trading at Rs 485 earlier in the day, a 29 percent premium at its issue price of 375 rupees per share.

With its debut, Bandhan Bank is now among the 10 most valuable banks in India with a limit in the market of Rs 56,920.65 crore. Among the 10 best banks, Bandhan Bank is the eighth most valued bank.

The initial public offering of Rs.4,470 crore from Bandhan Bank, the largest received by a bank, was subscribed 14.6 times last week. It was the second highest global subscription for an initial public offering in 2018 after Amber Enterprises India.

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The portion of qualified institutional buyers subscribed 38.7 times, while the share of shares reserved for people with high purchasing power was subscribed 13.9 times. The retail portion was subscribed 1.2 times.

The initial public offering included a new issue of shares of 9.77 million rupees, an offer of up to 1.4 million shares of International Finance Corp, controlled by the World Bank, and up to 75.65 lakh of shares of IFC FIG Investment Co.

One day before the opening of the initial public offering, the Calcutta-based lender had raised Rs 1,342 million by issuing 3.6 million shares to anchor investors at Rs 375 per share.

Jaikishan Parmar, senior equity analyst at Angel Broking, said the stock is slightly overvalued at current levels, but that the bank also has many positive aspects, such as strong asset quality and healthy profitability ratios.

“Based on the earnings estimates for fiscal year 2010, Bandhan is quoted at a price of 4.2 to reserve, while HDFC BankBSE -0.60%, the largest private sector lender, is quoted 3 times based on the profits of the fiscal year 2010. So, the stock is slightly overvalued, “said Parmar.

“If Bandhan continues to increase its loan portfolio by more than 35 percent and can improve the NIM, then greater stock growth is possible, the bank has healthy profitability ratios and strong asset quality, they have a solvency ratio. of 25%, which will ensure there is no dilution of capital in the near future, “said Parmar.

In addition to Angel Broking, CentrumBSE -0.53% Wealth, Antique Stock Broking, Hem Securities, Geojit and Prabhudas Lilladher had recommended subscribing to the problem.

“We estimate that Bandhan’s focus on the under-penetrated region and the new products will ensure a 23 percent loan book growth in FY18-FY20 and its relentless focus on cost control will lead to real values ​​of 19 percent in FY20.” said Antique Stock Brokerage in his note prior to the IPO.