Kolkata: The deal to buy Gruh Finance in a stock-swap merger would offer little respite to Bandhan Bank founder Chandra Shekhar Ghosh in complying with the regulatory need to bring down stake as the transaction would still leave 20 percent more of the Bank with its holding company.
This excess stake owned by promoter Bandhan Financial Holdings in the lender needs to be pared down by another 20 percentage points over the next few quarters from its 60 percent ownership after the merger.
The merger with Gruh Finance will bring down promoters' holding in Bandhan only to 61% from 82.28%.
Ghosh was penalised for failing to adhere to the RBI mandate within deadline which expired on August 22, 2018. RBI froze his remuneration at the current level and barred him from opening branches without prior approval.
Ghosh said the bank has not chalked out any timeline for diluting promoters' stake. "It may happen before six months."
It is learnt that the bank management has submitted an action plan to the regulator, but it did not reveal the details. The management may have to take the next course without much delay unless the regulator softens its stance and offers respite to the three-year old banking entity.
Bandhan Bank begun operation on August 23, 2015 while the licensing norm require it to pare the promoter holding down to 40% within three years of it.
The option before Bandhan promoter could be to go for offer for sale, or go for anther asset purchase in a stock swap deal like it did with Gruh.
The market regulator Securities & Exchange Board of India has already exempted Bandhan from the restriction of promoter selling shares within one year of listing.
The merger with Gruh would help Bandhan diversify its risks, but the primary driver behind the merger was to reduce the promoters' stake, sources close to the matter told ET.
It had held negotiations with PNB Housing Finance too for a takeover but the move failed as PNB Housing promoters were looking for an all-cash deal and that was also expensive.