Bandhan Bank, the private sector lender, has received SEBI's approval to go ahead and raise an estimated amount of Rs 2,500 crore through an initial share sale.

The Kolkata-based bank had filed the draft papers with SEBI on January 1. It obtained "observations" from the regulator on February 28, as per the update from the markets watchdog.

As per the draft papers, the Bandhan Bank's Initial Public Offerings (IPO) comprises a fresh issue of up to 9,76,63,910 equity shares and offer for sale of up to 1,40,50,780 shares by International Finance Corporation (IFC) and up to 75,65,804 shares by IFC FIG Investment Company.

The equity shares are expected to be listed on both the BSE and the NSE. The issue is considered to be the biggest banking sector IPO till date.

Kotak Mahindra Capital Company Ltd, Axis Capital Ltd, Goldman Sachs (India) Securities Pvt Ltd, JM Financial Institutional Securities and JP Morgan India Private Ltd are the book-running lead managers to the IPO issue.

Bandhan Bank started as a micro-finance entity transformed itself into a universal bank. In April 2014, the Reserve Bank of India (RBI), the government's bank had granted the banking license to Bandhan Financial Services as well as IDFC.