Bandhan Bank Ltd, India's first microfinance lender to receive a universal banking licence, and Delhi-based auto components maker Sandhar Technologies Ltd have received the Securities and Exchange Board of India’s approval to float initial public offerings.
SEBI issued final observations to Bandhan Bank and Sandhar Technologies’ IPO proposals on 28 February and 1 March, respectively, information on SEBI’s website showed. With this, seven companies have received SEBI’s clearance on IPOs this calendar.
As many as 46 firms had received clearance for IPOs in 2017, according to SEBI’s website.
Kolkata-based Bandhan Bank, which counts Singapore sovereign wealth fund GIC Pte Ltd and World Bank arm International Finance Corporation among its backers, had filed its draft prospectus on 1 January.
Bandhan has proposed to issue 97.66 million fresh shares while IFC will sell nearly half its holding through the IPO. IFC, directly and through its fund IFC FIG Investment Company, will sell a total of 21.61 million shares out of the 54.04 million shares (4.93% stake) in the IPO. Its stake will decline to 2.71% after accounting for the fresh issue of shares, VCCircle estimates show.
The size is estimated at Rs 5,500 crore ($860 million). It will see a total 10% stake dilution. Promoter entity Bandhan Financial Holding Ltd’s stake will fall to 82.28% after the issue from 89.62% currently. It needs to be seen if the bank issues fresh shares in a pre-IPO round. Else, the promoter will get three years from the date of listing to bring its stake down to 75% as part of SEBI’s minimum public float norms.
Bandhan will join erstwhile microlenders Equitas Holdings Ltd and Ujjivan Financial Services Ltd to tap into primary markets. Equitas and Ujjivan, which both turned into small finance banks, went public in early 2016.
Last year, Kedaara Capital-backed AU Small Finance Bank also floated an IPO that was heavily subscribed. The lender's shares had jumped 50% on debut.
Sandhar Technologies
Sandhar Technologies Ltd, which counts India-focussed private equity firm GTI Capital Beta Pvt. Ltd as its backer, had refiled its draft proposal on 8 December 2017.
The company will issue fresh shares worth Rs 300 crore, while sector-agnostic investor GTI Capital will offer 8 million shares for sale, a bulk of its holding.
GTI Capital had first invested in Sandhar Technologies in December 2012 and holds a little more than 8.93 million shares, representing 17.47% of the pre-issue equity capital. In the offering proposed two years ago, GTI Capital had offered to sell up to 5.11 million shares.
The company had received a green signal from the capital markets regulator for an IPO more than two years ago, but could not execute its plans.
GTI Capital was founded by Gaurav Dalmia, Jonathan Schulhof and Madhav Dhar. It invests in Indian or India-related businesses.
After the IPO, Sandhar Technologies will join nearly 50 listed peers such as Minda Industries Ltd, JBM Auto Ltd, Motherson Sumi Systems, Bharat Gears and GNA Axles Ltd, which listed on the stock exchanges last year.