At a time when banking majors are finding it difficult to raise capital, Maharashtra-based RBL Bank is expected to hit the market with a premium initial public offer on Aug 19.
Formerly known as the Ratnakar Bank Ltd, the bank is hoping to raise over Rs.1,200 crore, basically to shore up its capital base.
According to the prospectus, the bank will pursue inorganic growth initiatives to strengthen its competitive position, including stakes in small finance and payments bank.
For instance, the bank is considering a purchase of a minority stake in Utkarsh Micro Finance Private Limited, an applicant for a small finance bank license, subject to regulatory approvals.
The bank acquired Royal Bank of Scotland's business banking, credit card and mortgage portfolio businesses in fiscal 2014.
The RBL Bank also acquired minority stake in Swadhaar FinServe Private Limited, a company acting as a business correspondent, facilitator, agent and distributor for financial services providers for the purpose of offering such products and services to inadequately served sections of businesses, households and enterprises for a consideration of approximately Rs.20.5 crore.
The IPO comprises a fresh issue of Rs.832.5 crore and an offer of sale of shares by existing shareholders up to 16,909,628 equity shares.
The public issue is the first by a private bank in the past couple of years.
Last fiscal, the bank's total income stood at Rs.3,234.85 crore up from Rs.2,356.49 the previous fiscal.
The RBL Bank last fiscal logged a profit Rs.296.80 crore up from Rs.208.45 crore the previous fiscal.
The bank's gross non-performing assets as on 31.3.2016 stood at Rs.208.05 crore, up from Rs.Rs.77.75 crore at the end of previous fiscal. The net NPA at the end of last fiscal was Rs.124.44 crore up from Rs.38.59 crore.
The bank said the increase in its NPA is due to difficult economic conditions in India in recent years.
According to the bank it had provided for Rs.93.19 crore during the fiscal ended March 31, 2016 towards provision for NPA, non-performing investments, depreciation on investments, write-off and sacrifice for restructured advances.
The bank said as a part of its growth strategy, it is moving from a traditional corporate-commercial relationship-led local bank to a mid-sized bank with a diversified corporate, commercial and retail banking portfolio.
As of March 31, 2016, the bank had 197 branches, of which 94 were located in Maharashtra and 23 branches were located in Karnataka, leaving it more exposed to issues in these regions.
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