RBL Bank looks to raise ~1,600 cr via QIPS; sets ~352.57 as floor price

RBL Bank on Monday informed the exchanges that it will raise funds by issuing equity shares through the qualified institutional placement (QIP) route. The private lender said its board approved ~352.57 per share as floor price for the share sale.

Sources said RBL Bank could raise up to ~1,600 crore via the QIP route. This follows the bank’s plan to raise ~825.79 crore in equity capital by issuing shares by way of preferential allotment to five investors, namely Bajaj Finance, East Bridge Capital Master Fund I, FEG Mauritius FPI, Ward Ferry Management-managed hedge fund WF Asian Reconnaissance Fund, and Asiafocused stock hedge fund Ishana Capital.

The bank’s board agreed to allot 24.24 million shares at ~340.70 apiece on a private placement basis in accordance with the provisions of the Companies Act, 2013, and the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018

On July 9, RBL Bank had informed its shareholders at its annual general meeting that it would raise equity capital not exceeding ~3,500 crore. As of September 30, the bank's capital adequacy ratio had slipped from 13.7 per cent a year ago to 12.3 per cent.

In Q2FY20, the asset quality of the bank also worsened as its gross non-performing loans spiked 95 per cent to ~1,539 crore from ~789.21 crore in the same period a year ago. The bank's gross bad loan ratio nearly doubled to 2.6 per cent from 1.38 per cent and its profit slipped by 73 per cent to ~54 crore.