RBL Bank Stock Falls 4% After Rs.1,100 Cr Block Deal

According to people with knowledge of the situation, the foreign portfolio investor, acting through Maple II BV, has suggested selling Rs. 4.78 crore shares at a floor price of at least Rs. 226 each, less 5%. This transaction is valued at Rs 1,081 crore. IIFL Securities Ltd. has been appointed as the exclusive broker for this sale today. As of June 30, 2024, EQT held a 7.89% stake in the bank. On November 13, 2020, RBL Bank raised Rs 999 crore from Baring Private Equity Asia with a stake holding of 9.44% in fresh capital through a preferential allotment of shares. In 2022, EQT AB acquired Hong Kong-based Baring Private Equity Asia. Jimmy Mahatani, the managing director for Baring in 2020, invested in RBL Bank as he saw great potential in the Indian banking sector post-COVID-19 to gain market share. RBL Bank is well capitalized and a tech-enabled bank, making it well-positioned to acquire market share, which is why Rs. 999 crore was invested.

RBI Bank Q1 FY25 Result:

RBL Bank’s net profit for Q1 FY25 increased by 29% year-on-year (YoY) to Rs. 371.5 crore. The bank’s net interest income (NII) also increased by 19.5% to Rs. 1,699.9 crore, compared to Rs. 1,422.3 crore in Q1 FY24.  The lender’s net interest margin increased to 5.67% from 5.45% QoQ and 5.53% YoY. The bank’s gross non-performing assets (NPA) slightly increased to 2.69% from 2.65% in the previous quarter, while the net NPA remained stable at 0.74%.

Fundraising by RBL Bank of Rs. 6500 crore:

RBL Bank recently announced that they will raise up to Rs. 3,500 crore through a combination of Qualified Institutional Placement (QIP) of shares and a debt issue. The private lender will raise Rs. 3,500 crore through a QIP and Rs. 3,000 crore through an issue of debt securities by way of a private placement.

RBL Bank stock update: 

After yesterday’s announcement of this block deal, stock closed at NSE Rs. 238.75 per share.  The stock is 4% down and trading at Rs. 228.75 per share as the block deal was successfully done in the open market today.

Conclusion: From time to time, we have seen block deals like this, and it is not the first instance of an investor completely exiting the stock. Since RBL Bank is planning to raise Rs. 6,500 crore through QIP and debt issuance, this block deal is not expected to have a significant impact on the bank.

Disclaimer: This blog has been written exclusively for educational purposes. The securities  mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.