In the first IPO by a private sector lender in a decade, Kolhapur-headquartered RBL Bank on Wednesday announced Rs 1,230 crore Initial Public Offer that will hit the market on August 19.
The plan includes raising up to Rs 832.5 crore through the issue of fresh shares and up to Rs 380 crore in an offer for sale by existing shareholders.
The share sale, accounting for 10-11 per cent stake, will give the bank a valuation of over Rs 12,000 crore.
RBL Bank, formerly known as Ratnakar Bank, has fixed a price band of Rs 224-225 for the share sale, slated to open August 19.
The IPO was stuck for quite some time due to a pending case which the bank recently settled with the markets regulator Sebi, paving way for the the share sale.
“This is the largest ever fund raising by a domestic bank in an IPO and the first private sector issue in a decade,” veteran investment banker Uday Kotak, whose company is part of the book running lead managers, told reporters during the issue’s maiden roadshow.
Deepak Parekh of HDFC, which holds a small stake in RBL Bank, was also present at the roadshow along with SBI chairman Arundhati Bhattacharya.
It can be noted that Yes Bank was the last private sector lender to hit the capital markets in 2005. Taking into account state-run banks as well, Punjab and Sind Bank last went public in India six years ago in 2010.
With the RBI announcing on-tap licences for full-fledged banks, the number of banks hitting the markets is bound to increase as the regulations call for mandatory listing within a defined timeframe.
Existing investors, including Beacon India Private Equity and GPE will sell shares through the IPO.
RBL Bank had made a pre-IPO placement of 2.5 crore equity shares at Rs 195 per share last year to CDC Group, DVI Fund, Rimco and Asian Development Bank.
Managing director and CEO Vishwavir Ahuja said the foreign shareholding in the bank will stay at 49 per cent post-IPO as well, even though the lender has internal approvals to raise it till 74 per cent.
He said capital adequacy ratio of the bank will move up to 15 per cent, including 14 per cent in core tier-I buffer, post-issue from the present 12.9 per cent.
The bank, betting big on the agri front, is also picking up under 10 per cent in microlender Utkarsh Micro Finance, which has received an in-principle approval from the RBI to turn itself into a small finance bank.
Ahuja said the application on the transaction is pending with sector regulator RBI at present.
Half of the issue is reserved for qualified institutional buyers, 15 per cent to non-institutional bidders and 35 per cent to retail individual bidders.
Kotak Mahindra Capital, Axis Capital, Citigroup, Morgan Stanley are global merchant bankers for the deal, while HDFC Bank, ICICI Securities, IDFC Securities, IIFL and SBI Caps are the lead managers for the local market.