Bandhan Bank plunges 9% on block deal

New Delhi: Shares of Bandhan Bank in Monday's early trade tumbled 9 per cent after 34.56 crore shares exchanged hands in a block, according to ET NOW.

ET had earlier reported that promoters of Bandhan Bank were to sell shares worth Rs 10,500 crore in the secondary market during the early trade on Monday. The floor price of the stake sale at Rs 311 was 10 per cent less than the stock’s closing price Friday, as per the terms sheet.

At 9.30 am, the scrip was trading 9.31 per cent lower at Rs 313.10 on BSE. Volume at the exchange surged more than 477.13 times to 358 crore shares on BSE within 15 minutes of trade compared with an average two-week daily volume of 7.47 lakh shares. Turnover stood at Rs 11,231.05 crore.

ET on Sunday reported that Bandhan Financial Holdings, a promoter group entity, would sell close to a 20 per cent stake in the deal, according to the terms of the transaction. The transaction is aimed at reducing the promoter holding to comply with the central bank regulations, a source said.

Bandhan was to sell 337.4 million shares in the open market and has set a floor price of Rs 311 per share.

The promoter holding in the bank stood at 60.95 per cent. The RBI’s bank licence rules state that promoters of private banks should cut their shareholding to 40 per cent within three years and 20 per cent in 10 years.

Last year, the central bank did not allow Bandhan Bank to open new branches, citing the promoter ownership threshold applicable to banks. The central bank also ordered a freeze on the salary of the managing director and CEO, Chandra Shekhar Ghosh.

JP Morgan, Credit Suisse and Goldman Sachs are running the formal process to sell the shares.

Bandhan Bank did not reply to ET’s query, sent at a short notice.

Last month, Kotak Mahindra Bank raised nearly $2 billion by selling shares to institutions in two separate secondaries.