Disclosure: I am market making in the shares of RBL Bank
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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.
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
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RBL Bank :Spreading Wings
Disclosure:I am market making in the shares of RBL Bank
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(Disclosure:I am market making in the shares of RBL Bank)
India’s RBL Bank has hired four banks to manage a planned $250 million share sale in the first initial public offering in nine years by a private sector lender in the South Asian country, said people with knowledge of the matter.
Kotak Mahindra Capital Co., Standard Chartered Plc, Citigroup Inc. and Morgan Stanley (MS) will work on the IPO due next year, the people said, asking not to be identified before a public announcement. The Kolhapur, Maharashtra-based lender counts London-based CDC Group Plc, International Finance Corp. and Norwest Venture Partners, which is financed almost entirely by Wells Fargo & Co., among its investors.
Proceeds from the sale may help the bank open more branches and allow Chief Executive Officer Vishwavir Ahuja to increase loans at a faster pace. The 71-year-old lender with assets of more than 180 billion rupees ($3 billion) and 175 branches as of March 31 is seeking to expand in the country where only 35 percent of the adult population has a bank account.-from Bloomberg