Bandhan Bank MD & CEO Chandra Shekhar Ghosh is reportedly considering options to monetise his holding in Bandhan Financial Services, moving towards a partial divestment in Bandhan Bank, the Hindu BusinessLine reported, citing sources.
This comes after Ghosh said he departs as MD & CEO of Bandhan Bank, effective July 9, 2024.
Over the phone, Ghosh told the paper that the possibility of a stake sale is “speculative,” adding that he would “like to hold a strategic role in the holding company.”
Bandhan Bank did not respond to queries, as per the report.
Stake dilution ahead?
Sources said Ghosh is exploring possibilities concerning his shareholding in Bandhan Financial Services, including the potential sale of a portion of his stake in the promoter group.
He has begun discussions with several banks and private equity (PE) investors, albeit at preliminary stages, they said.
“He has initiated some early talks with a few banks to consider buying out his stake in the holding company but hasn’t received encouraging feedback yet. A few private equity investors have also been approached, and talks are at early stages,” as per two bankers.
Ghosh may retain 10 percent ownership in the company, the report added.
Stakeholders in Bandhan Bank
Bandhan Financial Services serves as the non-bank core investment company (CIC), managing shares of Bandhan Bank via Bandhan Financial Holdings.
As per the FY23 annual report of Bandhan Financial Services, Financial Inclusion Trust, North East Financial Inclusion Trust, and Bandhan Employee’s Welfare Trust collectively hold a 55.34 percent stake in the company.
Entities linked to Ghosh and/or his family members, alongside select employees of the Bandhan group, are among the shareholders in Bandhan Bank.
Additionally, shareholders of Bandhan Financial Services comprise institutions such as SIDBI, the International Finance Corporation, and the Singapore-based sovereign wealth fund GIC, held through Caladium Investments.
Bandhan started as a non-government organisation (NGO) in 2001, focussing on women empowerment and poverty alleviation. In 2006, it acquired a non-banking finance company (NBFC) licence and was renamed to Bandhan Financial Services Ltd (BFSL). In 2014, it received a banking licence from the Reserve Bank of India.
Launched with 501 branches and 50 ATMs in 24 states, it was India’s first microfinance institution to become a universal bank. Its branches have more than tripled to 1,647 over the past nine years, and it currently has 32.6 million customers. In 2019, it acquired Gruh Finance to provide affordable housing loans.
