Bandhan looks to bid for PNB Housing Finance

KOLKATA/MUMBAI: Bandhan Bank is thinking about a potential bid to acquire PNB Housing Finance, and is likely to submit an expression of interest later this week, other people aware of the topic stated.

State lender Punjab National Bank (PNB) and private equity investor Carlyle Group, which just about equally own a 66% stake, hired funding bankers to sell the housing finance company in a $2.25-billion deal. Expressions of interest (EoIs) are expected by way of August 24.

Private equity buyout consultants, sovereign wealth and world pension price range are expected to carry sway within the deal-making even though the bidding line-up would include positive strategic acquirers like Fullerton. Bandhan, riding on an extended proportion price rally, is predicted to judge a bid either on its own or be a part of a larger consortium, sources stated.

Incidentally, Singapore’s sovereign wealth manager GIC, some of the greatest shareholders in Bandhan, is within the fray to acquire PNB Housing. As reported by way of this newspaper up to now, GIC is predicted to shape a consortium with Blackstone Group and others.

When contacted about its interest in PNB Housing Finance, C S Ghosh, managing director and founding father of Bandhan Bank, stated, “I don't touch upon any speculation.”

At least a dozen bidders are likely to report particular person EoIs later this week even as they formalise consortiums to acquire the housing mortgage lender. Canadian Pension Plan Investment Board, KKR, Apax Partners, General Atlantic Partners, Advent International and Bain Capital also are expected to determine within the record of initial bidders. Recent media stories have speculated on Kotak Mahindra Bank, HDFC and Indiabulls becoming a member of the race, even though it is not clear if they continue to be competitive.

Bandhan Bank, which started as a micro-finance company, received a banking licence in 2014. It had a hugely a success listing on the stock exchanges previous this year and has seen its proportion price vault nearly 90%. Earlier this month, it briefly went past Yes Bank as the seventh greatest lender by way of market price.

Shares of Bandhan Bank closed at Rs 686 apiece on Tuesday, giving it a nearly Rs 82,000-crore market capitalisation. Bandhan shares had touched a high of Rs 741 on the BSE on August 9. PNB Housing Finance shares climbed 10% prior to now month to close at Rs 1,394 apiece on Tuesday, pegging its market price at greater than Rs 23,000 crore.

Bandhan is without doubt one of the fastest rising banks within the personal sector with a thrust on micro loans. The imaginable buy of PNB Housing Finance may supply this new-age financial institution a robust foothold in housing finance industry within the nation’s north and west areas, sources on the subject of the financial institution stated.

A piece on the banking neighborhood stated Bandhan shares — buying and selling at almost six times the book price — have sustained the rally because it has the bottom gross bad mortgage ratio of 1.26% amongst all Indian lenders. They puzzled if Bandhan would pursue the PNB Housing deal aggressively after learning the latter’s mortgage book.

Bandhan looks to bid for PNB Housing Finance Bandhan looks to bid for PNB Housing Finance Reviewed by Kailash on August 23, 2018 Rating: 5
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