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ChrysCap, PremjiInvest among anchor investors in RBL Bank

22 August, 2016

RBL Bank Ltd has raised Rs 364 crore ($54 million) by selling shares to anchor investors including private equity firm ChrysCap and Wipro chairman Azim Premji’s private investment arm, PremjiInvest, ahead of its initial public offering that opened on Friday.

The private-sector lender sold about 1.6 crore shares at Rs 225 apiece to 25 anchor investors that also included Government Pension Fund Global, the Norwegian sovereign wealth fund, and a host of mutual funds. ChrysCap and Government Pension Fund invested Rs 19 crore each while PremjiInvest put in Rs 10 crore.

Anchor allotment represents a sale of shares to institutional investors on the eve of opening an IPO. The issue size gets reduced to the extent of the anchor allotment.

On the first day of the offering, the issue crossed the two-thirds mark. The public offering of 37.9 million shares received bids for 25.15 million shares, led by retail investors and institutional buyers.

Retail investors bid for 86% of the shares reserved for them while institutional buyers’s quota was subscribed 67%. The portion set aside for non-institutional buyers, including corporate houses, was covered 20%.

The lender, earlier known as Ratnakar Bank Ltd, has fixed Rs 224-225 a share as the price band for the IPO. This will translate into an issue worth Rs 1,213 crore ($182 million) at the upper end of the price band and value the lender around $1.25 billion.

RBL Bank had earlier cut the size of the IPO after it raised capital from a bunch of investors in a pre-IPO placement late last year and as its selling shareholders trimmed the offer for sale. The lender cut the size of both the fresh issue and the number of shares on offer for sale.

Originally, it had sought to raise up to Rs 1,100 crore ($162 million then) through a fresh issue of shares and an offer for sale of 17.56 million shares by some shareholders.

It is now looking to raise Rs 832.5 crore ($125 million) through the fresh issue and an offer for sale of up to 16.9 million shares.

One of its private equity investors, Beacon India Private Equity Fund, is selling all its shares. The company, which counts several other PE shareholders, will also see some others such as Gaja Capital and Capvent part-exit in the IPO. 

RBL Bank had received approval from the Securities and Exchange Board of India (SEBI) on 27 July, nearly a year after it applied.

The issue got delayed as the capital markets regulator was examining some past violations by RBL Bank. In June, SEBI agreed to settle the outstanding case against RBL Bank for violation of disclosure norms related to issue of shares worth over Rs 600 crore to select investors.

SEBI had asked the bank to resolve the issue of past violations of the Companies Act, wherein it had issued securities to a higher number of subscribers than permitted under the Act.

The bank had sold shares under a rights issue and preferential allotment to over 49 investors, making it a public issue technically, in violation of the norms.

RBL will become the first private-sector bank to float an IPO in a decade. The last prominent private-sector bank to float an IPO was YES Bank in 2005. In 2010, state-run Punjab & Sind Bank went public.

Kotak Mahindra Capital, Axis Capital, Citigroup, Morgan Stanley, HDFC Bank, ICICI Securities, IDFC Securities, IIFL Holdings and SBI Capital Markets are managing the RBL issue.

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ChrysCap, PremjiInvest among anchor investors in RBL Bank

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