GIC-backed Indian lender makes market debut at 27% premium

Kolkata-based private lender Bandhan Bank, which counts Singapore sovereign wealth fund GIC as an investor, made a market debut at a 27 per cent premium to its issue price of 375 rupees on Tuesday.

At noon, it rose as much as 33 per cent to 499 rupees, but corrected closer to the end of the trading session to finish at 476.85 rupees. Yesterday, it closed at 468.3 rupees.

Mr Choo Yong Cheen, GIC's chief investment officer of private equity, said: "GIC is privileged to be part of Bandhan's transformative journey from a microfinance institution to being among India's most respected banks, and now a listed company... As a long-term investor, we remain confident in Bandhan's ability to tap the strong growth potential of India's financial services sector."

Bandhan Bank is a commercial bank focused on serving under-banked and under-penetrated markets in India. It was incorporated in December 2014, and started operating in August 2015.

GIC affiliate Caladium has a 16.7 per cent stake in it, making it the second-largest shareholder in the bank after Financial Inclusion Trust (32.91 per cent), according to the company's initial public offering prospectus lodged on March 20.

GIC does not divulge the yields on its investments, but The Business Times understands that based on the closing price of 476.85 rupees, the fund's multiple on capital is at least 11 times, implying that GIC got in when the stock was one-eleventh of what it is worth today.

In the past two years, GIC has made several investments in India, most of which had to do with land and property development.

Besides acquiring a 13.45 per cent stake in housing finance firm CanFin Homes, it partnered developer DLF to build a rental assets portfolio; tied up with another developer, K Raheja Corp, to acquire a 1.2ha land parcel at Worli for about US$94 million (S$123 million); worked with Ascendas-Singbridge to buy a 6.5ha site in Pune; and joined forces with another developer, Brigade Group, to acquire a 6.5ha property in Perungudi, Chennai, for 5.4 billion rupees (S$108 million).

Media has also reported that GIC last year partnered other investors to buy a 25 per cent stake in Indian lender Capital First, and this year invested in mortgage lender HDFC for 111 billion rupees alongside other investors.

A version of this article appeared in the print edition of The Straits Times on March 29, 2018, with the headline 'GIC-backed Indian lender makes market debut at 27% premium'. Print Edition | Subscribe