RBL Bank’s IPO awaits clearance as SEBI examines past violation

Capital markets regulator SEBI is examining past violation by RBL Bank (formerly Ratnakar Bank) as the private lender is awaiting clearance for its maiden public issue.

RBL, which is backed by several private equity firms, had applied for raising up to Rs 1,100 crore ($173 million) through fresh issue of shares  in addition to an offer for sale by some shareholders, in June this year. The proposed IPO would lead to complete exit for one of its private equity investors Beacon India Private Equity Fund. The company that counts several other PE shareholders would also see Gaja Capital and Capvent sell shares as part of the offer for sale. 

SEBI, in an update on pending IPO clearances, did not specify the nature of the violations by the bank that is under scanner. An email sent to the bank did not immediately elicit any response.

SEBI had previously also sought clarifications from the bank in September.

RBL Bank, which had acquired the business banking, credit cards and mortgage portfolios of Royal Bank of Scotland (RBS), has been on a capital raising spree with Rs 328 crore raised last year from investors as part of its new round. In February 2013, the bank raised $60.64 million from a group of investors, including Aditya Birla PE, IFC, IDFC Alternatives and Ascent Capital, among others, which valued it at around $511 million, according to VCCEdge, the data research platform of VCCircle.

The bank, which is one of the smallest in terms of loan book, has 183 branches across 13 states and plans to expand its capital base from the current fundraise.

For the financial year ended on March 31, 2015, it had total income Rs 2,356 crore with a net profit of Rs 207 crore. During the fiscal, its deposits grew to Rs 17,099 crore and advances rose to Rs 14,449 crore. As on March 31, 2015, the bank capital adequacy ratio under Basel III stood at 13.13 per cent.

The Catholic Syrian Bank Ltd is another private lender which is waiting to go public. It has already received SEBI’s approval for the issue.

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