RBL Bank Limited (formerly known as The Ratnakar Bank Ltd) is preparing to submit its draft red herring prospectus (DRHP) with the capital market regulator SEBI within a week. The Mumbai-based privately held bank is going public to comply with the requirements of the Reserve Bank of India (RBI) that last year mandated banks to list on stock exchanges within three years. Currently, the bank is owned by a clutch of private equity investors. A stock market listing would make it 41st publicly traded bank in India.
“The bank is looking to raise INR1,450 crore through its initial public offering (IPO), of which INR1,100 crore will be raised to increase the capital adequacy ratio of the bank and the rest to give exit to a few private equity funds,” an unnamed investment banker told Mint. The financial newspaper interviewed three people familiar with the development while a company spokesperson declined to comment.
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.