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RBL Bank plans to launch IPO in the next 3 quarters

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

RBL Bank, formerly known as Ratnakar Bank, plans to raise funds through an initial public offer which will hit the market in the next 8-9 months.

“We are preparing ourselves for the IPO and it may hit market in 8-9 months. It would not happen this fiscal but next calender year,” RBL Bank Managing Director Vishwavir Ahuja told PTI.

The quantum of offer has not been finalised by the board of the bank, he said, adding that the decision will be taken in the next few months after taking into account various factors including Basel III requirement.

The bank has been able to build scale and size in the last four years so that it gets right valuation, he said.
The capital is required for the next phase of operation as the bank has already done with transformation stage, he said, adding it has got high technology and risk management system.

The bank services more than 6 lakh customers and has a total business size of over Rs 26,000 crore. As of September total deposits were Rs 12,000 crore while advances stood at Rs 14,000 crore.

The bank posted a net profit of Rs 87 crore for six months ended September 2014, while for the entire 2013-14 the profit stood at Rs 93 crore.

So we have almost matched the net profit of the last fiscal in the first two quarters of the current financial year,” he said.-from ET

 

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World Economic Forum recognizes RBL Bank as a Global Growth Company

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

[gview file=”https://alphaideas.in/wp-content/uploads/2014/11/RBL-Bank-WEF-GGC-2014-Press-release.pdf”]

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AGM

RBL Bank seeks shareholder approval to go public

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

[gview file=”https://alphaideas.in/wp-content/uploads/2014/10/EGM-Notice-October-29-2014.pdf”]

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Vishwavir Ahuja:Let’s do it

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

Bankers said sometimes, the opportunity to build a business from scratch encouraged them to leave cushy jobs at multinational corporations and take up assignments in relatively smaller banks.

In 2009, Vishwavir Ahuja joined Ratnakar Bank (now RBL Bank) as managing director and CEO, after spending about a decade as Bank of America’s India CEO. “It was really a question of what I could do next. It is a very important question for someone who is 49 years old and has been a chief executive for about 10 years. I had two choices—either move into a bigger role globally or build an institution that would have a meaningful impact on the Indian economy. The latter was far more attractive, as I had no interest in leaving India. Therefore, when the opportunity came, I said ‘let’s do it’,” Ahuja told Business Standard.

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Ratnakar Bank hires four banks for Rs. 1,200 Crore IPO

Hat Tip: Shivam Bose

 

(Disclosure:I am market making in the shares of Ratnakar Bank)
Ratnakar Bank Ltd (RBL) has appointed four investment banks for its Rs.1,200 crore initial public offer (IPO), which is expected to hit the market before March 2015, three people close to the development said. The bank is expected to file its documents with the market regulator as early as October.

The bank has mandated Kotak Mahindra Capital Co. Ltd, Citigroup Inc., Standard Chartered Plc and Morgan Stanley to handle the issue. Mint had reported on 1 July that the private sector lender plans to dilute about 10% stake through the IPO, which values the bank at Rs.12,000 crore.

 

Though RBL has no immediate requirement for fresh capital, 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, 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.
Most investors, however, may continue to stay invested, the person quoted above said. “It is unlikely that any of the existing investors will sell their investments in the bank because none of them have stayed invested for more than three-and-a-half years. Some of the bank’s shareholders are development finance institutions, which typically hold their investments for many years,” he said.

The share sale, if it materialises, will make RBL the 41st publicly traded bank in India. The IPO comes at a time when secondary markets are buoyant and interest in primary markets is starting to pick up.

 

Vinod Wadhwani, director at Ambit Corporate Finance Pte Ltd, expects a robust investor response to the IPO. “Given that most of the public sector banks are reeling under the huge pressure of non-performing loans, investor interest in public sector banks is limited. There is a dearth of new and quality paper supply in the private sector as well. Private sector banks such as Ratnakar Bank, which has a competitive management team in place, is expected to continue its growth trajectory. Hence, the investor response to the IPO is expected to be robust,” Wadhwani said.

 

In an interview with Mint in June, Rajeev Ahuja, head of strategy at the bank, had said that no single investor holds more than 5% in RBL. An IPO will hence mean a further reduction in stakes of existing investors. Besides, it will also give liquidity to employees for their stock options and probably attract more large investors who would want to buy into a listed bank.
As on 31 March, the bank had a loan book of Rs.9,835 crore, according to RBL’s website. In fiscal year 2014, it added 51 branches and a similar number will be added in the current fiscal year, Ahuja had said. As on March 2014, RBL had 185 branches and 350 ATMs with more than 500,000 clients.
Overall, the bank is targeting growth of 40-50% in advances and deposits over the next couple of years, Ahuja said. For the year ended March 2014 the bank’s net advances grew 54% while deposits rose 39%.
from Mint