Bandhan Bank made a fantastic opening today on the BSE. As against the IPO price of Rs.385, it opened Rs.110 higher at Rs.485, up over 29% of the IPO price.

The issue had got a great response, getting subscribed 14.63 times.

The QIB quota saw 38.68 times subscription, while the NII category was subscribed 13.89 times and Retail Investors remains small at 1.19 times.

India’s largest micro lender, Bandhan Bank is a commercial bank, having commenced operations on 23rd Aug 2015, after getting RBI’s in-principle approval for new bank license in April 2014, along with IDFC. Bandhan Bank’s operations span both general banking (887 bank branches, 430 ATMs serving 21 lakh customers) and micro lending (2,633 doorstep service centres (DSCs) serving 99 lakh micro loan customers). Geographically, distribution network is concentrated in East and North East India, with 3 states - West Bengal, Assam and Bihar - together accounting for 57% of branches and DSCs as of 31-12-17.

In our New Issue Analysis, we had stated, “Since Bandhan is yet to establish a track record and prove its ability to diversify as scale of operations enlarge, one must wait for an attractive price point. Meanwhile, due to the market meltdown, more established and larger banks are available at much attractive valuations. Hence, citing expensive valuations and declining sheen of BFSI sector in the secondary markets, one is advised to skip the IPO for now and review the stock post listing.”