KOLKATA – Bandhan Bank Ltd. shares saw their intraday gains significantly reduced on Tuesday after the private lender issued a categorical denial of reports suggesting it was a potential acquisition target for First Abu Dhabi Bank (FAB).
The bank, in a statement, explicitly refuted any involvement in acquisition-related discussions or proposals with First Abu Dhabi Bank, asserting that references to Bandhan Bank in the original report were factually incorrect. "The bank categorically denies the reported speculation regarding any acquisition related discussions or proposal involving Bandhan Bank and First Abu Dhabi Bank," Bandhan Bank stated, emphasizing its commitment to regulatory compliance under Regulation 30 of the SEBI LODR.
Report Sparked Market Speculation
The denial followed a report from Moneycontrol, which indicated that FAB, the largest lender in the United Arab Emirates, was actively seeking acquisition targets among mid-sized domestic private banks in India. Sources quoted in the report suggested that FAB was keen on acquiring a majority 51 percent stake if a deal materialized, and had reportedly evaluated several options, including meetings with Bandhan Bank and a Kerala-based bank.
The Moneycontrol report highlighted that many mid-sized and older private banks, including Bandhan Bank, CSB, and South Indian Bank, were trading at or below their book value, making them attractive targets for acquisition.
Bandhan Bank Shares React
Following the initial report, Bandhan Bank shares had risen to an intraday high of Rs 157.40. However, after the bank's denial, the stock fell to Rs 152.95, cutting its gains to approximately 1.5 percent higher for the day. Despite the volatility, analyst consensus tracked by Bloomberg for Bandhan Bank indicates a 12-month target of Rs 193.50, suggesting a potential upside of 25 percent from current levels. The lender currently holds 13 'Buy' recommendations, 11 'Hold' recommendations, and four 'Sell' calls.