Delighted that another one of my unlisted babies is going public soon.
RBL Bank (formerly Ratnakar Bank) is all set to launch its ₹1,100-crore initial public offer this July. The last public offer by a full-fledged bank was the ₹470-crore issue by Punjab and Sind Bank in December 2010.
The company had submitted its draft offer papers to market regulator SEBI in June 2015. According to these papers, the bank intended to raise ₹1,100 crore in fresh equity to shore up its tier 1 capital and place on the block another 1.75 crore shares held by existing investors Beacon India Private Equity fund, GPE (India) and others.
However, SEBI kept the IPO in ‘abeyance’ for nearly a year because the bank had issued shares to over 4,500 investors in two tranches, in 2003 and 2006. Under the Companies Act of 1956, an unlisted company wasn’t allowed to allot shares to more than 49 investors. This figure was raised to 200 investors by Companies Act 2013. However, even under the new rules, RBL had breached this ‘deemed public issue’ norm of the Act.
Optional exit
According to sources, SEBI is understood to have approved the bank’s IPO, provided the bank gives an optional exit through a refund to existing investors. The buyback process is currently underway, the source added. RBL could not be reached for comment.
In the draft red herring prospectus, as of June 19, 2015, the bank disclosed it had 11,724 shareholders, including private equity investments by CDC Group, International Finance Corporation, Norwest Venture Partners and others, all holding under 5 per cent equity each.
In the document, RBL named Kotak Investment Banking, Axis Capital, Citigroup, Morgan Stanley, HDFC Bank, ICICI Securities, IDFC Securities, IIFL Holdings and SBI Capital Markets as the merchant bankers to the issue. A processing status update by SEBI on Monday still maintained the IPO’s status as “kept in abeyance.”
RBL’s IPO comes at a time when the markets have welcomed fund-raising by companies in the lending business.-from Hindu