Mumbai-based RBL Bank Limited (formerly known as The Ratnakar Bank Ltd) has filed its draft red herring prospectus (DRHP) with the market regulator SEBI. The initial public offer (IPO) will be managed by Kotak Mahindra Capital, Axis Capital, Citigroup, Morgan Stanley, HDFC Bank, ICICI Securities, IDFC Securities, IIFL Holdings and SBI Capital Markets.
As we reported earlier, RBL Bank plans to raise INR1,100 crore from the IPO which will also see existing shareholders Beacon India Private Equity Fund and GPE India offloading their shares. While the INR1,100 crore will go to the bank, 1.75 crore shares will be sold by existing investors through an offer for sale (OFS).
Out of the total 1.75 crore shares, the biggest chunk is offered by Beacon India Private Equity Fund which plans to sell its entire stake of 95.05 lakh shares. GPE India plans to offload 35.25 lakh shares out of its total shareholding of 1.04 crore shares. A total of 45.37 lakh shares will be offered by several Category I shareholders.
Use of funds
Substantially all proceeds after IPO related expenses will be used to augment the Bank’s Tier-I capital base to meet its future capital requirements. As on March 31, 2015, RBL Bank’s total capital adequacy ratio (CAR) and common equity Tier-I CAR was 13.13% and 12.74% respectively.
Although RBL Bank has been around since 1943, it continued to remain a regional player for long. It is only in the last five years that its strategy has changed in favor of nation-wide expansion. Under a new management led by chief executive officer Vishwavir Ahuja, RBL Bank has expanded to a network of 183 branches and 351 ATMs across 13 Indian states. Majority of this growth was fuelled by the acquisition of business banking, credit cards business and mortgage portfolio of Royal Bank of Scotland (RBS) in August 2013.
The corporate overhaul at RBL Bank was accompanied with capital infusion of over INR1,400 crore by global and local private equity and development funds in the last three years. Prominent among the investors are Housing Development Finance Corporation (HDFC), Norwest Venture Partners, Samara Capital, Beacon Capital, Faering Capital, TVS Shriram, Cartica Capital, Ascent Capital, Aditya Birla Private Equity, IDFC’s Spice Fund and ICICI’s Emerging India Fund are among its shareholders.
In 2014, RBL Bank also raised INR328 crore by issuing fresh shares to UK’s CDC Group Plc, Asia Capital and Advisors Pte Ltd, as well as existing shareholders International Finance Corporation and Gaja Capital.