Abu Dhabi’s IHC in talks to invest in Bandhan Bank promoter, shares jump

Abu Dhabi’s International Holding Co. is among investors in early-stage talks to acquire a stake in Bandhan Financial Services Ltd (BFSL), the promoter of Bandhan Bank, The Economic Times reported on Tuesday, citing people familiar with the matter.

Bandhan Bank shares jumped as much as 9% after the report, with investors reacting to the prospect of a major Gulf investor entering the lender’s promoter structure.

The stock rose to ₹171.68 on the NSE during the session before giving up some of its gains.

Bandhan Bank later said it was unaware of any development concerning the reported talks and had received no communication on the matter.

The clarification came after BSE and the National Stock Exchange sought a response from the lender.

“Since the Bank is unaware of any such development, the Bank is not in the position to comment on the correctness of the abovementioned news item,” Bandhan Bank said in its exchange filing.

The reported transaction involves the privately held promoter company rather than a direct investment in Bandhan Bank.

The Economic Times reported that BFSL had appointed Jefferies to find investors for a stake of about 25% to 32%.

First Abu Dhabi Bank has also been approached, while Qatar Investment Authority and private-equity firms including Carlyle and EQT are among potential investors that have been sounded out, according to the report.

The discussions remain preliminary and may not lead to a transaction.

The proposed deal is also expected to provide an exit to some of BFSL’s longstanding institutional investors.

Singapore sovereign wealth fund GIC, through Caladium Investment, owns about 16.7% of BFSL, while the International Finance Corporation holds about 13.6%.

Together, they own just over 30% of the promoter company and have been investors for more than a decade.

The Economic Times estimated the potential transaction at as much as $600 million.

BFSL sits above Bandhan Bank in the group’s ownership structure. Through Bandhan Financial Holdings, the group owns the promoter stake in the listed bank and holds interests in other financial businesses.

Bandhan Financial Holdings owned about 37.5% of Bandhan Bank at the end of June. That stake must eventually be reduced to 26% by 2030 under conditions governing promoter shareholding.

A sale of shares in BFSL would not by itself reduce the promoter’s holding in Bandhan Bank. That would require a separate sale of shares in the listed lender. The talks come as the Bandhan group considers a broader restructuring of its financial businesses.

Moneycontrol reported that Jefferies had been appointed to examine options including changes to BFSL’s shareholder base, stake sales in Bandhan Bank and Bandhan Asset Management Co., and other ways to raise capital.

Bandhan Financial Holdings owns about 60% of Bandhan AMC, with GIC and ChrysCapital holding the rest.

A buyback of BFSL shares has also been considered, although the company’s cash balance of about ₹837 crore at the end of March could limit the size of such a transaction.

IHC is chaired by Sheikh Tahnoon bin Zayed Al Nahyan, Abu Dhabi’s deputy ruler and the United Arab Emirates’ national security adviser.