Home Business Bandhan Bank and GRUH Finance announce merger

Bandhan Bank and GRUH Finance announce merger

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Combined distribution network to be 4,182 banking outlets in 34 of the
36 states and union territories
• Loan book to have micro loans (58%), retail home loans (28%) and
other loans (14%)
• The move to give Bandhan Bank a pan-India affordable housing
franchise
Mumbai, January 7, 2019: The Board of Directors of Bandhan Bank Limited and GRUH
Finance Limited today 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%.
Mr. 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.”
Mr. 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 underbanked and rural customers.”
Mr. 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.”

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