International Holding Company and First Abu Dhabi Bank are among the investors assessing a possible stake purchase in Bandhan Financial Services, the promoter holding company of Bandhan Bank, in a transaction that could reshape the ownership structure of one of India's better-known private lenders, according to people familiar with the matter.
The discussions come as early institutional investors GIC and the International Finance Corporation, which together own about 30% of Bandhan Financial Services, look to exit their investment. Bandhan Financial Services, led by Bandhan founder Chandra Shekhar Ghosh, has been working with advisers at Jefferies to court strategic investors for a stake estimated at 25% to 32%, the people said. Private equity funds have also been approached to test appetite for the asset.
Strategic Exit Window
The process underscores a broader recalibration among early investors in Indian financial services companies, particularly those that have matured from high-growth, inclusion-focused lenders into more established banking franchises. For GIC and IFC, a sale would offer a path to monetise a long-held position in a promoter vehicle that has already played a central role in Bandhan's evolution from microfinance roots to a universal bank.
For Bandhan, the search for a new shareholder is not merely a liquidity event. A strategic investor could provide balance-sheet support, long-term credibility and potentially a more diversified ownership base at a time when Indian banks are operating in a competitive environment shaped by tighter funding conditions, slower deposit growth and heightened regulatory scrutiny. The promoter entity's stake sale, if completed, would also likely be watched closely by market participants for signals on governance, control and future capital planning.
The involvement of Abu Dhabi-based institutions is notable because it reflects continued Gulf interest in India's financial sector, where large, well-capitalised investors have increasingly looked for exposure to domestic consumption, lending and digital finance themes. IHC, one of the region's most aggressive investment platforms, and FAB, the United Arab Emirates' largest lender, would each bring different strategic advantages if either chose to proceed, though no final decision has been made, the people said.
Bandhan's Ownership Puzzle
Bandhan Bank's promoter structure has long been a point of focus for investors. Unlike many Indian lenders with tightly held family ownership, Bandhan's promoter shareholding has been shaped by institutional capital and the company's transition from microfinance to banking. That makes any change in BFSL's shareholder base especially consequential, because the promoter vehicle sits at the centre of the bank's control architecture.
A sale of 25% to 32% in BFSL would be large enough to alter the composition of the promoter group and could influence future strategic decisions, even if operational control remains unchanged. It would also likely require careful structuring to satisfy regulatory expectations and to ensure that the incoming investor aligns with the bank's long-term governance framework.
The timing is also significant. Indian banks have been under pressure to strengthen deposit franchises and maintain asset quality discipline, while investors continue to reward lenders with clear capital visibility and stable ownership. In that context, a promoter stake sale can be interpreted as both a liquidity event for existing backers and a signal that the institution is entering a more mature phase of ownership.
Gulf Capital In Play
The fact that multiple categories of investors have been sounded out suggests the process is still exploratory, with valuation, control rights and strategic fit likely to determine whether a transaction advances. For global sovereign wealth and development finance investors such as GIC and IFC, the exit would be consistent with a long-horizon investment cycle. For Gulf financial institutions, the opportunity could offer a foothold in India's expanding banking market at a time when cross-border capital flows between the Gulf and India are deepening.
Bandhan Financial Services and Jefferies have not publicly detailed the process, and the identities of the final bidders, if any, remain fluid. Still, the outreach to IHC and First Abu Dhabi Bank signals that the promoter stake is being marketed to investors with both capital strength and strategic ambition.
If a deal materialises, it would mark one of the more closely watched ownership transactions in India's banking sector this year, not because it changes the bank's day-to-day lending operations, but because it could redefine the shareholder base behind a lender that has become emblematic of India's financial inclusion story. For now, the process remains in the market-testing stage, with the next move likely to depend on investor appetite, pricing and regulatory comfort.