RBL Bank's Rs1,200-cr IPO subscribed 308%

Newly licensed private sector lender RBL Bank's Rs1,200-crore ($182 million) initial public offer (IPO) was subscribed 308.33 per cent on the second day of the sale on Monday, stock exchange data showed.

By 5:30 pm, RBL Bank's IPO had received applications for 116.86 million shares, against the offer of 37.90 million shares

As early as 11:00 am today, the first day of sale of trading an Indian bank received bids for 39.1 million shares - or 1.03 times the 37.9 million shares on offer - the highest for any Indian bank since 2010.

The IPO, sale, which opened on Friday, will close tomorrow.

RBL is selling new shares in a price band of Rs224 to Rs225 per share to raise up to Rs830 crore to boost its capital base. The sale includes shares of some of its shareholders who are also selling up to 16.9 million shares in the IPO to raise up to Rs380 crore.

Demand from retail individual investors, whose investments cannot exceed Rs2,00,000 in an IPO, stood at 3.25 times the 18.92 million shares set apart for them, stock exchange data showed.

The institutional investor book was subscribed 4.27 times, while the non-institutional category, comprising high-net-worth individuals, was subscribed 1.07 times.

The Mumbai-headquartered private sector lender had raised Rs363.88 crore by selling shares to anchor investor, Cornerstone investors, on Thursday.

RBL Bank said in a stock exchange filing that it issued 16.17 million shares to 25 institutional investors at Rs225 each, the upper end of the Rs224-225 price band.

Investors included Merrill Lynch Capital Markets Singapore Pte Ltd, FIL Mauritius Investments Ltd, Government Pension Fund Global (Norway), Goldman Sachs India Fund Ltd, GMO Emerging Domestic Opportunities Fund and Auburn Ltd (the public market investment arm of home-grown private equity fund ChrysCapital Investment Advisors India Pvt. Ltd).

Kotak Mahindra Capital Co. Ltd, Citigroup Global Markets India Pvt. Ltd, Axis Capital Ltd, Morgan Stanley India, HDFC Bank Ltd, ICICI Securities Ltd, IIFL Holdings Ltd, IDFC Securities Ltd and SBI Capital Markets Ltd are managing the share sale.

RBL Bank will become the country's first private sector bank to go public in more than a decade. The last private sector bank to launch an IPO in India was Yes Bank Ltd, which raised Rs.315 crore in July 2005.

In 2010, state-owned Punjab and Sind Bank Ltd managed to raise Rs.480 crore through its IPO.

RBL Bank's issue, including the anchor allotment, comprises a fresh issue of shares worth Rs.832.5 crore and sale of shares?worth?Rs.378.5 crore by existing shareholders.

The bank aims to raise its capital base for growth and comply with incremental capital needs under the Basel-III norms as well as the Reserve Bank of India's norms.

In 2015-16, RBL Bank reported a revenue of Rs.3,234.85 crore, up from Rs.2,356.49 crore a year ago, and a profit of Rs296.8 crore, up from Rs208.45 crore a year ago.

The bank's income grew at an annual rate of 50 per cent compounded over the last five years. Its return on equity has also doubled in the past five years, according to data made available in the issue documents.

RBL Bank has 197 branches and 362 ATMs across 16 states. Its shares are valued at 2.2 times price-to-book (P/B) on historical value.