The RBL Bank IPO would open for subscription today, i.e. 19th August, 2016. It has come up with an IPO with an issue price band of Rs 224-225 per share and closes subscription in 3 days. Some of the top MNC companies are lead managers to this issue and hence it is catching the attention of investors. In this article, I would provide some of the interesting facts about an RBL Bank IPO. Should you invest in an RBL Bank IPO or not?
Also Read: A-Z review of RBL Bank IPO
Details of RBL Bank IPO
If you are already aware, skip this section.
- IPO opens: 19-Aug-2016
- IPO closes: 23-Aug-2016
- Face Value: Rs 10 per share
- Issue price band: Rs 224 to 225 per share
- Issue size: Rs 1,212 Crores
- Market lot: minimum of 65 shares
- Minimum investment: Rs 14,560 on lower price band
- Lead Managers: Axis Capital, Kotak Bank, Citigroup global markets, Morgan Stanley etc.,
- Listing: BSE / NSE
- Download RBL Bank IPO Prospectus at this link.
RBL Bank IPO – 7 Interesting Facts about this IPO
1) Objects of the issue
RBL Bank IPO consists of fresh issue of Rs 800 Crores and Offer for Sale of 1.69 Crore shares by selling shareholders. Selling shareholders include Elephant India Finance, Capvent India Private Equity Fund, Gaja Trustee Company, etc., Other shareholders include Beacon India PE Fund and GPE India. The company would not get any money from Offer for sale.
2) Brand Building initiated in 2014
Ratnakar bank name got changed to RBL Bank in 2014 as part of the brand building exercise. Currently in FY16 it has 197 branches, 362 ATM’s across 16 Indian cities. It is serving 1.9 mn customers.
3) Bank Profits
It earned profits of Rs 207 Crores in FY15 and Rs 292 Crores in FY16 indicating 41% jump year on year. Its Net Interest Income increased by 47% and Operating Profit by 50% from last year.
4) Increase in Non Performing Assets (NPA)
Its Net Non Performing Assets (NPA) were at 0.27% in FY15 and it is increased to 0.59% in FY16 (doubled). Banking sector faced severe pressure about NPA provisions in H2 of FY16. RBL has provisioned Rs 93 Crores in FY16 towards NPA, depreciation and write-offs.
5) Loan Exposure
Its loan exposure is majorly limited to 6-7 sectors. Infra – 7.4%; Real Estate – 7.08%; Chemicals – 6.5%; Traders – 6.5%; Food – 6.5%; Construction – 5.93%; NBFC – 5.06%.
6) Bank Deposits
Bank deposits have increased from Rs 17,099 Crores in FY15 to Rs 24,348 Crores in FY16. Top 20 depositors constitute to 22% of total deposits.
7) Dividend Payout
The bank has paid 9% (Rs 0.9) to 12% (Rs 1.2) per share in FY14 and FY15 respectively. It has paid an interim dividend of Rs 1.5 per share in FY16. No final dividend payout expected.
Should you invest in an RBL Bank IPO?
The bank is doing good in terms of revenues and profits. Like I indicated in my earlier analysis, its issue price of Rs 225 (upper price band) is over priced compared to its peers. If a such share is available at discounted prices after listing, one can accumulate and invest more. High risk investors can invest in an RBL Bank IPO now. However, one may or may not get listing gains. If you get listing gains, you can do the party.
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RBL Bank IPO – 7 Interesting Facts about this IP
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