RBL Bank To Raise Rs 6,500 Crore Via Equity And Debt

RBL Bank Ltd.'s board on Friday gave a go-ahead to raise up to Rs 6,500 crore through a mix of equity and debt instruments.

The private sector lender will seek to raise up to Rs 3,500 crore through qualified institutional placement of shares in one or more tranches, and Rs 3,000 crore via debt securities, according to an exchange filing.

The bank in 2024 had received approval for the fund raise of the same amount on Aug. 7, 2024. However, the lender had not raised any funds and the validity period for the fund raise had expired.

The bank will now seek approval for the fundraise from its shareholders during its 82nd Annual General Meeting.

Worsening asset quality, higher provisions and lower net interest income weighed on RBL Bank's June quarter results. The bank's standalone net profit fell by 46% on year to Rs 200 crore. However, the bottomline was threefold higher sequentially.

Net interest income of the bank declined 13% on year to Rs 1,481 crore. The net interest margin of the bank fell sharply to 4.50% in the June quarter from 4.89% in the quarter ended March.

Provisions and contingencies against bad loans rose nearly 21% on year to Rs 442 crore.

Gross non-performing assets ratio of the bank rose to 2.78% from 2.6% in the previous quarter. Net NPA ratio also rose to 0.45% compared with 0.29% in the March quarter.

The bank's gross slippage ratio fell to 1.15% in the June quarter from 1.18% as on March-end and 0.86% a year ago.

The announcement on the fundraise came after the market hours. The stock settled 4.07% higher at Rs 261.05 apiece on the NSE, compared to a 0.08% decline in the benchmark Nifty 50.

RBL Bank's shares have risen 15.11% in the last 12 months and 65.22% year-to-date.

Out of 23 analysts tracking the company, 13 maintain a 'buy' rating, three recommend a 'hold' and seven suggest 'sell', according to Bloomberg data. The average 12-month consensus price target of Rs 262.43 implies a potential upside of 0.5%.