Subscribe to RBL Bank IPO: Angel Broking

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Published: August 21, 2016 11:10:14 AM

RBL Bank IPO which hit the capital markets on August 19, subscribed by 0.66 times on the first day of offer, according to the data available with stock exchange.

Prior to RBL Bank, YES Bank was the last private sector lender whose IPO hit the primary markets in 2005. (Source: Website)Prior to RBL Bank, YES Bank was the last private sector lender whose IPO hit the primary markets in 2005. (Source: Website)

RBL Bank IPO which hit the capital markets on August 19, subscribed by 0.66 times on the first day of offer, according to the data available with stock exchange. The issue will close on August 23. The bank was formerly known as Ratnakar Bank. Prior to RBL Bank, YES Bank was the last private sector lender whose IPO hit the primary markets in 2005. Shares of RBL Bank are proposed to be listed on BSE and NSE both. Brokerage firm Angel Broking is bullish on the IPO.

Here are 4 reasons why Angel Broking has given ‘Subscribe’ rating to the RBL Bank IPO:

1 At the upper end of the price band of Rs 225, the stock is offered at 2.4 times its pre-IPO book value (BV), while on post IPO BV it’s offered at 2.1 times. This means the issue has a captivating pricing valuation.

2. While the new management of RBL Bank has been combative in expanding the loan book, it also put in place an efficient risk management system which has led to gross non-performing assets (GNPAs) being contained below 1 per cent in the last four years.

3. The new management has inducted fresh talent from other private sector banks and has also invested heavily in technology, along with branch expansions. Number of branches and employees count has been aggravated.

4. During 2010, the new management team took over charge after which the bank adopted a new approach and transformed itself from being a traditional bank to a new age bank competing with other private sector banks.

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