February 21, 2017 1:52:17 am
Bandhan Bank hopes to fetch premium valuation when it comes out with an initial public offering (IPO) of equity shares next year, as the lender’s net profit has surged to Rs 888 crore in ten months between April and January of the current fiscal year 2016-17, its MD & CEO Chandra Shekhar Ghosh. The bank, which started operations in September 2015, had made net profit of Rs 275 crore in its first seven months of operations in 2015-16.
“In the seven months of my starting as bank (in 2015-16) I have done profit of Rs 275 crore. If you see in the following ten months up to January (in 2016-17), we have now Rs 888 crore profits (PAT) from April to January. So why not will people given us money (during the IPO),” Ghosh said. The bank had a net interest margin of around 3.5 per cent and its non-performing asset (NPA) ratio was 0.31 per cent at January-end.
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Even though capital may not be immediately required, the lender plans to stick to the IPO schedule stipulated by the Reserve Bank of India. “We are planning to come out with an IPO within three years time as required by the banking regulator,” he said. Bandhan Bank has a capital of around Rs 5000 crore and its capital adequacy ratio is 29 per cent.
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He said the lender is receiving inquiries from many investors from India and overseas, but it does not see any need to issue fresh shares ahead of the IPO.
The bank plans to increase the number of branches from 805 in 32 states at present to 840 by March, with 68 per cent of its branches being in rural areas, he said. Bandhan Bank, which transformed from a micro-finance institutions into a full scale bank, continues to focus on micro and retail loans. Most of the bank advances are in range the range up to Rs 1 lakh per client.
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