GIC raises stake in Bandhan Bank to 4.49%

Kolkata: Singapore’s sovereign wealth fund, GIC, has raised its stake in Bandhan Bank by 1.1% to 4.49%, showing confidence on the bank and its micro-lending business model.

GIC invests in the bank through affiliate Caladium Investment PTE Ltd, which now holds 7.3 crore shares in the Kolkata-based lender. It accumulated 1.77 crore shares through secondary market operations during the January-March period.

The bank reported the change in shareholding on Tuesday. Foreign investors held 13.05% of the bank while the promoter, Bandhan Financial Holdings, owned 60.95% at the end of March.


The bank has seen its stock price battered over the last few months on concerns over asset quality, especially because it has an over 60% exposure to microfinance. Its price tumbled 9.6% Tuesday to Rs 195.45 on the BSE, where the benchmark Sensex fell 3.2%.

Bandhan's deposits climbed 32% year-on-year to Rs 57,073 crore and advances increased 60% to Rs 71,825 crore at the end of March. Bandhan's share of current and saving account deposit was 37%, provisional numbers showed. It is likely to announce its quarterly results on May 12, a senior bank executive said.

“While near-term concerns on microfinance portfolio remain, Bandhan has nevertheless been able to improve its recovery rate. Further, growth trend in micro-banking deposits highlights Bandhan’s comfortable position to recover dues from its MFI borrowers, even as the environment remains uncertain and delinquency rates increase,” Motilal Oswal said in a note on April 13, maintaining a ‘buy’ rating on the stock.

Its collection efficiency, which was about 98.7% for the January-March period, may see some adverse impact after the lockdown is lifted, analysts said.