RBL Bank Share Price Hits Over Five-Year High As Emirates NBD To Invest $3 Billion

RBL Bank Ltd. share price rose to the highest level since February 2020 in Monday's session, despite disappointing results for the September quarter, as $3 billion-deal with Emirates NBD boosted sentiment for the stock.

The second largest bank of Dubai will buy a 60% stake in the Indian private bank through a preferential allotment. For the investment, up to 41.6 crore shares at Rs 280 apiece will get allotted to Emirates NBD on a preferential basis. An open offer is a consequence of preferential allotment, he said in the second-quarter conference call on Sunday.

The open offer will take place after all regulatory approvals. Preferential placement will be followed 15 days post open offer, Chief Executive Officer R Subramaniakumar said.

Post the investment, RBL Bank's net worth will increase to Rs 42,000 crore, Subramaniakumar said. The deal will conclude in April, and after that, RBL Bank will be a listed entity of Emirates NBD.

RBL Bank Q2 Earnings Key Highlights (YoY)

• Net Profit down 20% at Rs 178 crore versus Rs 222 crore

• Net interest income down 4% at Rs 1551 crore versus Rs 1615 crore

• Other income up 1% at Rs 932 crore versus Rs 927 crore

• Provisions down 19% at Rs 499 crore versus Rs 618 crore

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RBL Bank share price rose 5.14% to Rs 314.90 apiece, the highest level since Feb 27, 2020. It was trading 2.5% higher at Rs 307.40 apiece as of 9:22 a.m., as compared to 0.78% advance in the NSE Nifty 50 index.

The stock advanced 74.9% in 12 months, and 95.73% on year-to-date basis.

Out of 23 analysts tracking the company, 13 maintain a 'buy' rating, five recommend a 'hold' and five suggest 'sell', according to Bloomberg data. The average 12-month consensus price target implies a downside of 0.8%.

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