Bandhan Bank share price live: Stock makes smart debut, should you buy now?
Bandhan Bank share price live: Stock makes smart debut, should you buy now?
Bandhan Bank shares made a stellar debut on the bourses with the stock opening at Rs 485, a premium of 28.33 per cent against its issue price of Rs 375 on the BSE. On NSE, the stock listed at Rs 499, a premium of 33 per cent. The stock incurred further gains, touching an intraday high of Rs 494.80 on the BSE. Bandhan Bank IPO, which was India's biggest ever initial public offering (IPO) by a bank, was oversubscribed by 14.6 times.
Bulk of the demand in the IPO came from institutional investors. The qualified institutional buyer (QIB) portion of the issue was subscribed 39 times. The non-institutional investor portion, commonly referred to as high-networth individual (HNI) quota, was subscribed 14 times, with most of the bids in the segment coming from 'corporates'. The retail portion, however, failed to garner much demand with the portion seeing just 1.2 times subscription.
Although the Kolkata-based bank had been priced at a premium, analysts recommended subscribe on its IPO and suggested to hold the stock for the long-term.
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Bandhan Bank at Close
In terms of equity volume, 139.07 lakh shares of the company were traded on BSE and over 9 crore shares changed hands on NSE during the day. The company's market valuation stood at Rs 56,920.65 crore.
Bandhan Bank beats all PSUs except SBI in market cap race
Bandhan Bank share price, on the first day of listing after its IPO, turned more valuable than all public sector banks (barring SBI), following a stellar debut on Dalal Street. The Kolkata-based bank also surpassed the market capitalisation of some private sector players such as RBL Bank, ING Vysya Bank, Federal Bank and IDFC Bank, becoming the eighth largest bank in India in terms of market value. The newly-licensed commercial bank listed at Rs 499 on NSE, a 33 per cent premium against its issue price of Rs 375. On BSE the stock listed at Rs 485, and settled the day 27 per cent higher at Rs 477. At this price, Bandhan Bank quoted a market capitalisation of 56878.9 crore on the NSE, data available with database INSIGHT showed.
Bandhan Bank at close
The stock incurred 1.6 per cent loss against its opening price at Rs 485 on the BSE.
Risk factors on Bandhan Bank
1) High competition in the core banking segment
2) Limited historical track record and relatively very less experience in banking business
3) High concentration in East & Northeast India (81% of total advances)
Bandhan Bank price
On BSE, the stock extended gains to hit a fresh intraday high of Rs 494.90, up 32 per cent.
Bandhan Bank Financials
For the 9MFY18, the bank had robust fundamentals with net interest margin (NIM) at 9.9%, net interest income at Rs2,169 crore (90% of FY17), net profit at Rs958 crore (86%) along with high return ratios of 25.6% RoE and 4.1% RoA (annualised basis).
Bandhan Bank details
Bandhan Bank began operations in August 15 and had a total business of Rs 48,225 crore as of 31 December 2017, through a vast network of 887 bank branches and 430 ATMs, together serving over 2.13 million general banking customers.
Consistent track record of growing a quality asset and liability franchise
As of December 31, 2017, bank’s percentage of Gross NPAs to Gross Advances (excluding IBPC/Assignment) (“NPAs”) was 1.67% of its portfolio. Bank’s strong NPA position is largely driven by its group-based individual lending model, its focus on income generating loans made to women, its strong systems to track loan utilization, monitor credit and ensure collection, and its extensive risk management practices, such as lending progressively higher amounts only to members who have built up a track record of good repayment, which taken together have led to low rates of default.
Bandhan Bank Details
Bandhan Bank (Bandhan) began operations in August 2015 and had a total business of Rs 48,225 crore as of 31 December 2017, through a vast network of 887 bank branches and 430 ATMs, together serving over 2.13 million general banking customers.
Fianncials
For FY17 and FY16, Bandhan Bank had a total income of Rs 4,320.12 crore and Rs 1,731.25 crore, respectively, and profit after tax (PAT) as restated at Rs 1,111.95 crore and Rs 275.24 crore.
Bandhan Bank share price update
At 11:30 am, Bandhan Bank shares were trading at 474.60, up 27 per cent on 100 points against its issue price.
Prasanth Prabhakaran, Senior President & CEO, YES Securities
IPO market is driven by both HNI and retail. HNI's leverage is usually high that comes in for selling for three-four days after listing of the stock. So, once the stock settles down, finds its base price and can be compared with its peers, only then, investors should take a call on freshlu listed Bandhan Bank.
Prasanth Prabhakaran, Senior President & CEO, YES Securities
If you have already received Bandhan Bank shares, you should hold it. But investors, willing to buy at these levels, should wait for the new-listed stock price to settle down first before taking a plunge.
Angel Broking on Bandhan Bank
At upper-end of the IPO price band, Bandhan Bank IPO is valued at 8.3 times Q3FY18 book value (pre-IPO) and on Post dilution basis at 5x of BV. Though valuations are on the higher side, we expect such premium valuations to persist given (a) healthy return ratio (25 per cent+ RoE for FY17 and 9MFY18), (b) balance sheet strength (24.8% CAR ratio, CASA - 33.2 per cent) and (c) experienced and focused management.
Considering the above positives, Angel Broking had recommend 'subscribe' on the issue.
Bandhan Bank IPO details
The public issue of Bandhan Bank consisted of an offer for sale (OFS) of 2.16 crore shares (1.97 per cent of pre-issue stake) sold by the two shareholders – 1.41 crore shares (1.28 per cent of equity capital) by International Finance Corporation and 0.76 crore shares (1.28 per cent of equity capital) by IFC FIG Investment. The IPO also consisted of a fresh issue of 9.77 crore shares.
Bandhan Bank shares make smart debut
On BSE, the stock listed at Rs 485, while on NSE, at Rs 499, which is its intraday high level too.
About Bandhan Bank
After migrating from only micro-financing activity, the bank has now adopted a unique model of entering normal banking services after getting the in-principle license from the RBI. This retail banking network has grown to 864 bank branches and 386 ATMs as of 30 September 2017. The bank's network is particularly strong in east and northeast India, with West Bengal, Assam and Bihar together accounting for 57.75 per and 58.13 per cent of branches and door step services (DSC) respectively.
Bandhan Bank IPO size
Bandhan Bank proposed to raise Rs 4,473 crore in a price band of Rs 370-375 per share.
Bandhan Bank share price
At 10:30 am, Bandhan Bank was trading at Rs 462.50 on the BSE, up 23 per cent against its issue price.
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