The Board of Directors of Bandhan Bank Limited and GRUH Finance Limited approved the merger of GRUH into Bandhan Bank. The merger would be subject to regulatory and shareholder approvals.
The share exchange ratio accepted by the boards of Bandhan Bank and GRUH is 568 equity shares of face value of Rs.10 each of Bandhan Bank to be issued for every 1,000 equity shares of face value of Rs.2 each of GRUH.
The merger would help Bandhan Bank achieve product and geographic diversification while improving penetration in its core customer segment. GRUH will get access to a wider distribution network, a larger customer base and low cost deposit base of Bandhan Bank.
Post-merger, based on pro-forma financials as of September 30, 2018, Bandhan Bank would have outstanding loan book AUM of Rs.50,036 crore. Loan book would consist of micro loans (58%), retail home loans (28%) and other loans (14%). Combined distribution network would comprise 4,182 banking outlets and 476 ATMs across 34 states and union territories of India. Merged entity would have more than 31,000 employees serving about 1.5 crore customers across the country. Post-merger, the shareholding of Bandhan Financial Holdings Limited (NOFHC) in Bandhan Bank would reduce from 82.3% to 61.0%.
Chandra Shekhar Ghosh, MD & CEO, Bandhan Bank, said, “GRUH has a strong pedigree and is one of the best housing finance companies in India. This merger would bring together two companies and teams that have a common mission of serving the under banked population of the country. Bandhan Bank is excited about this merger as it gives us the opportunity to build a unique pan-India affordable housing franchise.”
Sudhin Choksey, MD & CEO of GRUH, said, “GRUH’s strong presence in the west, combined with Bandhan Bank’s deep penetration in the east and north-eastern regions of the country will enable the combined entity to better serve the financial needs of under-banked and rural customers.”
Deepak Parekh, Chairman, HDFC Limited, said, “Bandhan Bank and GRUH have similar core values, business ethics and are committed to financial inclusion. This merger will create one of the largest rural and semi-urban lending platforms in India.”
