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RBL Bank set to file for IPO within a week

Hat Tip: Shivam Bose

(Disclosure:I am market making in the shares of RBL Bank)

RBL Bank Ltd, a privately held lender backed by a clutch of private equity funds, is set to file its draft red herring prospectus (DRHP) with the markets regulator within a week, said three people familiar with the development.

“The bank is looking to raise Rs.1,450 through its initial public offering (IPO), of which Rs.1,100 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,” said the first investment banker mentioned above.

The bank has hired around nine investment banks to run the process. The IPO would help the bank comply with the Reserve Bank of India (RBI) guidelines issued last year that directed all banks to list within three years of starting business.

Over the last three years, global and local private equity and development funds have invested over Rs.1,400 crore in the bank in three tranches. Housing Development Finance Corp. Ltd (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.

The share sale will make RBL the 41st publicly traded bank in India.-from Mint
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Piramal’s IndiaREIT Investors get screwed

Ajay Piramal-backed Indiareit Fund has sought consent from investors in its real estate private equity fund for another extension of the product’s tenure by a year. Indiareit Fund Scheme III, which was launched in July 2007, is due to mature in July 2015. The fund was to mature in July 2013 but it had sought investor approval to push the tenure by two years at that time.

 

In a letter addressed to investors, Piramal Fund Management’s managing director Khushru Jijina said the stated time periods are essential to realise the estimated values, and without the extension, monetisation would become extremely difficult. He believes any shorter time bound liquidation would significantly hamper the residual values. “We laid out and followed an assetwise strategy in order to bring the remaining investments closer to final realisation,” said Jijina in the letter.

 

Rich investors put money in this fund in 2007— the peak of the previous stock market bull run— as real estate prices were showing no signs of fatigue. Then, the fund raised close to Rs 600 crore. Investors had to shell out at least Rs 25 lakh to participate in the fund. The fund returned 99.83%, or Rs 24.95 lakh, of the total capital called by the fund.

 

“Though investors made an absolute return of 33%, the IRR from the fund works out to a mere 5.06%,” says Manoj Nagpal, CEO, Outlook Asia Capital. In addition to the low return, there is uncertainty when the balance money will come back. from ET
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Market hates PSU Bank stocks

Source:Deepak Singh

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Not fair