Finance

RBL Bank looks to raise up to Rs 1,800 crore through a mix of preferential issue and QIP

Updated : November 28, 2019 06:32 PM IST

RBL Bank's board meeting is scheduled on November 30 to approve the fund raise, it told stock exchanges on November 27.

The board of RBL Bank approved share sale plan to raise up to Rs 3,500 crores earlier this year. RBL Bank's Capital Adequacy Ratio stood at 12.3 percent (incl interim profits) as of Q2 FY20 compared to 13.7 percent the year ago.

RBL Bank looks to raise up to Rs 1,800 crore through a mix of preferential issue and QIP

RBL Bank is looking to raise between Rs 1,500 crore and Rs 1,800 crore through a mix of a preferential issue and a qualified institutional placement (QIP), people aware of the matter told CNBC-TV18.

A board meeting is scheduled on November 30 to approve the fundraise, RBL Bank told stock exchanges on November 27 without disclosing the quantum of the fund-raise.

Sources said, "The bank may immediately raise half of this sum, or approximately Rs 800 crore via the preferential issue."

CNBC-TV18 had earlier reported that the bank is in talks with three potential suitors, including Bajaj Holdings & Investment, and private equity firms- Chrys Capital and Blackstone.

A person aware of the deal who wished not to be named, told CNBC-TV18, the preferential issue to investors may be done with a partial equity and partial warrants structure with investors capping its stake at under five percent each. The deal contours, however, are still under discussion.

An individual entity/institution is not allowed to hold more than 10 percent stake in a bank, as per Reserve Bank of India’s norms on shareholding in private banks. Further, an investment of over 5 percent in a bank also requires RBI’s prior approval.

Further, the bank may raise roughly another Rs 800 crore through a QIP in the following weeks to meet its capital requirements, added another person in the know.

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