RBL Bank has priced its initial public offering (IPO) aimed at raising R1,212.97 crore (when calculated at the upper end of the price band), between R224 and R225 a share.
The lender, which will debut on the bourses on August 19, comprises a fresh issue equity shares aggregating R832.50 crore and an offer for sale (OFS) of over 1.69 crore shares by Beacon India private equity fund, GPE India and other shareholders. Anchor investors will be allotted shares soon, investment bankers said.
This will be the first IPO by a private sector lender since 2005 when Yes Bank had hit the capital markets.
According to guidelines put out by the Securities and Exchange Board of India (Sebi), 50% of the shares are reserved for qualified institutional buyers (QIB) category, 15% for high net-worth individuals (HNIs) and 35% for retail investors. Up to 60% of the QIB portion has been reserved for anchor investors and one-third of the anchor investor portion has been reserved for domestic mutual funds. Five per cent of the QIB category, excluding the anchor investor portion, has been reserved for mutual funds on a discretionary basis.
For the year to March 2016, RBL’s total income grew by 37% year-on-year and net profit was up by 41.19%. RBL ended FY16 with advances of Rs 21,229 crore, up 46% and deposits of R24,348.6 crore, up 42.4%. The bank’s provisions grew by 90% during the same period. As of March 2016, gross non performing assets (NPAs) of the bank were 0.98 of its total advances.
RBL Bank was incorporated as a small, regional bank in Maharashtra in 1943 with two branches in Kolhapur and Sangli. The bank offers a range of banking products and services customised to cater to the needs of large corporations, small and medium enterprises (“SMEs”), agricultural customers, retail customers and development banking and financial inclusion (low income) customers.
As part of its growth strategy, RBL acquired certain Indian businesses of the Royal Bank of Scotland in fiscal 2014. As of March 2016, the bank has 197 branches and 362 ATMs spread across 16 Indian states and union territories. The bank proposes to use the net proceeds of the issue for its future capital requirements.
In a pre-IPO placement held on December 16, 2015, RBL Bank allotted 2.5 crore shares at a price of R195 per share to investors, amounting to R487.5 crore. CDC Group, Asian Development Bank, DVI Fund (Mauritius) were among these investors.
The global co-ordinators and book running lead managers (GCBRLMs) to the issue are Axis Capital Ltd, Kotak Mahindra Capital, Citigroup Global and Morgan Stanley. The book running lead managers (BRLMs) to the issue are HDFC Bank, ICICI Securities, IDFC Securities, IIFL Holdings and SBI Capital Markets.