PNB Housing Finance Limited has been drawing several potential buyers and Bandhan Bank, the private sector banking institution based in Kolkata, has now entered the fray to buy the entity. Bandhan is expected to provide its official EoI or expression of interest for PNB Housing Finance sometime soon according to reports. The bank has already held discussions with Singapore-based GIC and other global financial conglomerates along with some sovereign wealth funds with regard to setting up a consortium for the acquisition. GIC is also considering a similar private equity backed consortium that will be formed by Blackstone as per reports.
Bandhan Bank could make cash & stock or a stock offer as compared to a pure cash bid for PNB Housing Finance according to the latest reports. The bank has made itself clear on its desire to acquire a controlling stake in PNB Housing Finance and initial meetings have also taken place with the Managing Director at PNB Housing Finance, Sanjaya Gupta and other top officials. Bandhan Bank is reportedly being advised on this transaction by Goldman Sachs.
Buying out PNB Housing Finance could be a good deal for Bandhan Bank since the newly listed banking entity will get access to a sizable mortgage book without having to build it all up. Additionally, this may help Bandhan Financial Holdings lower its overall stake in Bandhan Bank as per the regulations of the RBI. The promoter stake has to be lowered to 40% within 3 years of officially commencing banking operations. Bandhan Bank still has 82.8% owned by Bandhan Financial Holdings.