RBL Bank shares debuts at near 22% premium

RBL Bank Ltd made a strong stock market debut on Wednesday with its shares trading at a premium of 21.87 per cent on the first day of trading on the Bombay Stock Exchange (BSE).

Shares of the newly licensed bank opened trading at Rs273.70 apiece on the BSE compared with the initial public offer price of Rs225 a share,a near 22 per cent premium.

The benchmark BSE Sensex was up 0.5 per cent in morning trade.

The company's IPO was subscribed 69.62 times, with the qualified institutional buyers (QIBs) portion getting subscribed 85.08 times, non-institutional investors chunk 198.06 times and retail investors portion 5.70 times, as per data available with the NSE.

The IPO garnered around Rs60,000 crore. It attracted over 1.02 million applications.

The first IPO by a private lender in a decade was open for subscription between August 19 and 23 and the price band was fixed at Rs224-225 per share.

The plan included raising up to Rs832.50 crore through the issue of fresh shares and up to Rs380.46 crore in an offer for sale by existing shareholders. The share sale, accounting for 10-11 per cent stake, will give the bank a valuation of over Rs12,000 crore.

The Rs 1,213 crore public issue of RBL Bank, which was earlier known as Ratnakar Bank, was oversubscribed 69.62 times on overwhelming response from investors. RBL Bank is one of India's fastest growing private sector banks in the last six years. Its loan book grew at CAGR of over 60 per cent in the last 5 years with better diversification and increasing granularity.

The bank has managed to grow its CASA at robust pace of 45 CAGR over FY11-FY16, while it has improved market share from 0.1 per cent to 0.5 per cent.

It has posted a superior CAGR growth of 51 per cent from FY2012 to FY2016 in its advances book.

Net interest margin has grown to 2.96 per cent in FY16 from 2.68 per cent in FY14.

RBL has maintained a capital adequacy ratio of 12.94 per cent and 13.13 per cent in FY16 and FY15, respectively.

As of 31 March 2016, it had 197 interconnected branches and 362 interconnected ATMs spread across 16 Indian states and union territories serving approximately 1.90 million customers.

It acquired certain Indian businesses of Royal Bank of Scotland, including RBS's business banking, credit card and mortgage portfolio businesses in FY14.