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RBL Bank to raise $260 mn from Multiples PE, CDC and others

07 July, 2017

RBL Bank Ltd said on Friday it plans to raise Rs 1,680 crore ($260 million) from a clutch of investors including the UK-based CDC Group Plc and private equity firm Multiples Alternate Asset Management Pvt. Ltd.

The company’s board has approved a plan to sell 32.6 million shares at Rs 515 a share, it informed the stock exchanges. This is slightly lower than the bank’s closing share price of Rs 527.05 on the BSE on Friday.

The fundraise is aimed at augmenting the bank’s tier 1 capital for supporting growth in business and capitalising on inorganic growth opportunities, the bank said, adding that it will also use the funds for general corporate purposes.

The move assumes significance considering that RBL Bank was reported to be in talks to acquire microfinance institution Bharat Financial Inclusion Ltd earlier this year.

Apart from CDC and Multiples PE, the bank plans to issue shares to ABG Capital, HDFC Standard Life Insurance Company Ltd, ICICI Lombard Insurance Company Ltd, LTR Focus Fund, Steadview Capital and Global Ivy Ventures LLP, the investment firm owned by former Hero MotoCorp joint managing director Sunil Munjal.

On its own, CDC has been bullish on RBL Bank. The UK institution has invested in RBL separately over the years and is also a Limited Partner, or investor, for Multiples PE’s funds.

Multiples is also investing in RBL through a separate entity called Plenty CI Fund, which gives CDC additional exposure to RBL Bank.

CDC made its first direct investment in RBL Bank in 2014, picking up a 4.8% stake.

In September 2015, CDC provided debt financing of Rs 330 crore ($50 million) to the lender.

Last year, RBL became the first bank to go public in a decade. Its listing saw anchor investments from private equity firm ChrysCapital and PremjiInvest, the family investment arm of Wipro Ltd chairman Azim Premji.

Overall, the firm raised around Rs 1,213 crore via its IPO, excluding the amount raised during the anchor allotment. The public offering was covered almost 70 times and the bank made a stellar debut on the stock exchange.

RBL Bank reported revenue of Rs 3,713 crore for the financial year 2016-17 and a net profit of around Rs 446 crore.

On Thursday, the bank reported that its bad loan divergence for 2016-17 was Rs 339 crore. This means that while RBL Bank reported its net bad loans at Rs 208.05 crore, the Reserve Bank of India had put the figure at Rs 547.39 crore.

*This article has been updated to correct the bank’s revenue and profit numbers for 2016-17.

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RBL Bank to raise $260 mn from Multiples PE, CDC and others

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