WAYS2CAPITAL STOCK TIPS : Bandhan Bank Falls 3% As Macquarie Sees Pressure Till Promoter Stake Reduction

Bandhan Bank shares fell more than 3 percent in the morning trade on March 18 after Macquarie said it expects selling pressure to continue in the stock till promoter reduce stakes.

Macquarie has an underperform call on the bank with a price target at Rs 400 apiece, implying 22 percent potential downside from current levels.

 The stock can remain under pressure till promoter stake reduction is done, according to the brokerage house said.

It said HDFC, which sold Gruh Finance to Bandhan Bank, must sell 5.06 percent equity in the merged company before the merger can consummate.

HDFC’s 5 percent stake sale can result in supply pressure of Rs 3,000 crore based on current market price, it added.

Macquarie is concerned by the expensive acquisition of Gruh and what it means for future capital allocation.

In January, the board members of Bandhan Bank approved the scheme of amalgamation of Gruh Finance into and with the Bank.

On March 14, the Reserve Bank of India conveyed it has no objection for the voluntary amalgamation. HDFC held 57.83 percent stake in Gruh Finance as of December 2018. That means, HDFC will have about 15 percent stake in the merged entity.

RBI also granted in-principle approval to HDFC to acquire shareholding of 9.9 percent or less of the paid-up voting equity capital of Bandhan Bank upon the effective date of the scheme.

HDFC had sought RBI’s approval to acquire and hold 14.96 percent or such other lower percentage stake in Bandhan Bank.

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