RBL Bank Looks to Script New Future With Rs 1,200 Crore IPO

RBL Bank Ltd., formerly called Ratnakar Bank Ltd., aims to raise Rs 1,210 crore through an initial public offer, which will open on August 19 and close on August 23, the bank said in a press release.

Of the Rs 1,210 crore, the private sector bank aims to raise Rs 832 crore through the issue of fresh equity shares. Existing shareholders of the bank will look to sell their stake for a total of Rs 380 crore, the release said. The price band for the issue has been fixed at Rs 224-225 per share.

The bank had, in December, raised Rs 488 crore in a pre-IPO private placement, at an issue price of Rs 195 per share.

Kotak Mahindra Capital Co Ltd., Axis Capital Ltd., and HDFC Bank Ltd., among others are the bankers to the issue.

Legacy Issues

The IPO was stuck for over a year due to a pending case which the bank recently settled with market regulator Securities and Exchange Board of India, paving the way for the share sale. RBL Bank had filed its draft red herring prospectus with SEBI on June 2015.

The issue was delayed after SEBI served RBL Bank with a show cause notice with regard to an earlier infringement.

The bank’s current management, headed by Managing Director and Chief Executive Officer Vishwavir Ahuja took charge after 2010. Before that, the bank had conducted five rights issues, raising Rs 601.12 crore from 12,285 investors. In each instance, the bank erred by issuing shares to more than 49 investors, SEBI said in a notice dated May 30, 2016.

In that same notice, SEBI directed RBL Bank to pay Rs 47.60 lakh as monetary settlement charges and also to provide an opportunity for existing investors to exit.

In an interview with BloombergQuint, Ahuja said the management had put the matter behind them and that blaming the previous management would not get them anywhere.

“When we stepped into the bank, there were many legacy issues that had to be dealt with. But we went in with eyes open. You know, nobody forced us to take on the challenge,” Ahuja said. “The strategy is not to look back and criticise the past for what happened or did not happen.”