Private sector Bandhan Bank, the first microfinance institution (MFI) to come under the universal banking landscape in the country, has already started its initial public offering (IPO) process.
"When we got the in-principle license from RBI, we were asked to come out with an IPO by 2018", founder and CEO of Bandhan Bank Chandra Sekhar Ghosh said at the bank's second foundation anniversary in Kolkata on Wednesday. "Now that we have completed two full years and a year left for the IPO, the process has been already started. The bank has embarked upon selecting investment bankers/banker to start with", Ghosh added.
"It was imperative to start the process now. Else we will not be able to conduct the entire IPO process by 2018. Consultation with all the stakeholders would have to be and will take time."
The size and the timing of the issue would be decided later, Ghosh said. The bank posted a net profit of Rs 327 crore in the first quarter of current fiscal.
In the first two years, the bank mobilised deposits of Rs 23,500 crore with a loan book of Rs 21,000 crore. It has a network of 840 branches across India as well as 383 ATMs and will soon be entering the distribution of insurance and mutual fund products, Ghosh revealed.
Bandhan Bank, like other microfinance institutions, offers loans to small borrowers. These small quantum loans which are often used as capital to set up livelihood businesses have traditionally been considered to be high-risk, hence, high-interest. However, Bandhan Bank has so far had a fairly high rate of repayment.
(With PTI inputs)