MICROCAPITAL BRIEF: Bandhan Financial Services of India Plans Public Offering (IPO) Within Three Years

Bandhan Financial Services, an Indian microfinance institution that recently received a provisional banking license from the Reserve Bank of India (RBI), reportedly is planning to raise capital through an initial public offering (IPO) sometime within the next three years. Bandhan currently reports total capital of INR 12 billion (USD 204 million). With its newly acquired license, Bandhan seeks to transform from a microfinance institution into a commercial bank, offering deposit services to its microborrowers.

Bandhan, which is based in the Indian city of Kolkata, reported as of February 2014 a gross loan portfolio of INR 50.7 billion (USD 967 million) and 5.5 million borrowers. As of March 2013, it reported return on assets of 4.73 percent and return on equity of 26.1 percent.

By Meraj Husain, Research Associate

About Bandhan Financial Services

Bandhan Financial Services Private Limited is a microfinance institution (MFI) based in Kolkata, India, that was founded in 2002. As of February 2014, it operates approximately 2,000 branches in 22 states and union territories in India and reports a gross loan portfolio of INR 50.7 billion (USD 967 million) and 5.5 million borrowers. It offers microenterprise loans as well as loans for health emergencies. As of March 2013, it reported return on assets of 4.73 percent and return on equity of 26.1 percent. As of 2014, Bandhan has received a provisional banking license that would allow it to accept deposits in 2015.

Sources and Additional Resources

[1] DNA India: Bandhan Financial Services Plans IPO in Next Three Years

MicroCapital, May 20, 2014, Bandhan Financial Services of India Reduces Lending Rate to 22.4% Per Year

MicroCapital, April 14, 2014, Reserve Bank of India (RBI) Grants Preliminary Approval to Microlender Bandhan to Receive Banking License

MicroCapital, March 2, 2014, Bandhan of India Borrows $26m from International Finance Corporation (IFC), Seeks $16m from Swiss Investor

MicroCapital, January 14, 2014, Standard Chartered Bank Loans $12m to India’s Bandhan Financial Services for Microenterprise Lending

MicroCapital, July 29, 2010, SKS Microfinance Launches India’s First Initial Public Offering (IPO) by a Microfinance Institution

MicroCapital Universe Profile: Bandhan Financial Services Private Limited

MicroCapital Universe Profile: Reserve Bank of India

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