RBL Bank Limited
| RBL Bank Limited ipo Note |
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Issue Period
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Issue Opens On*: Friday, August 19, 2016
Issue Closes On : Tuesday, August 23, 2016
*The Anchor Investor Bidding Date shall be one Working Day prior to the Bid/ Issue
Opening date.
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Price Band
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Rs. 224 - 225
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Bid Lot
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65 Equity Shares and multiple thereof
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Offer Details
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Fresh Issue of Rs.832.50 Crores
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+ Offer for Sale of up to 1,69,09,628 shares (Rs.378.78^ - Rs.380.47~ Cr)
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Gross Issue Size ( in Rs.)
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Rs.1,211.28^ - Rs.1,212.97~ Crores
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Gross Issue size (in Shares)
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5,39,09,628~ – 5,40,74,806^ Shares
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Issue Structure :
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QIB*
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50% of the offer ( 2,69,54,813~ - 2,70,37,402^ Shares ) (Rs.605.64^ - Rs.606.48~ Cr)
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NIB
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15% of the offer ( 80,86,445~ - 81,11,221^ Shares ) (Rs.181.69^ - Rs.181.95~ Cr)
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Retail
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35% of the offer ( 1,88,68,370~ - 1,89,26,183^ Shares ) (Rs.423.95^ - Rs.424.54~ Cr)
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* Company may allocate up to 60% Shares of the QIB Portion to Anchor Investors.
^Lower Price Band and ~Upper Price Band
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Mode of Payment
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ASBA Mandatory ( No Cheque will be accepted)
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Lead Manager
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Axis Capital Ltd,
Kotak Mahindra Capital, Citigroup Global, Morgan Stanley, HDFC Bank,
ICICI Securities, IDFC Securities, IIFL Holdings, SBI Capital
Markets
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Registrar
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Link Intime India Pvt. Ltd.
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Issue Highlights
•
RBL Bank Ltd (“RBL”) is one of the fastest growing Private Sector Bank,
having wide distribution network with presence through 197 interconnected branches and
362 interconnected ATMs in 16 States and Union Territories in India serving over
1.9 million customers.
•
RBL
offers a comprehensive range of Banking Products and Services
customized to cater to the needs of Large Corporations, Small and Medium
Enterprises (“SMEs”), Agricultural customers, Retail customers
and Development Banking & Financial inclusion (low income) customers.
•
RBL has maintained high CASA deposits.
AS of 31st March 2016 the CASA deposits representing 18.46% of the total deposits consisted of
savings deposits (7.22% of total) and current deposits (11.42% of total).
•
RBL Posted a superior CAGR growth of 51% from FY2012 to FY2016 in its
Advances Book.
•
The Net Interest Margin
has grown from 2.68% in FY 2014 to 2.96% in FY2016.
•
RBL has maintained a capital adequacy ratio
of 12.94% and 13.13% in FY16 & FY15 respectively.
•
The shares will be listed on BSE and NSE.
Background – Company & Promoters
Company and promoters
Incorporated
on June 14, 1943, RBL Bank Limited (“RBL”) a small Regional Bank in
Maharashtra commenced their operation with 2 Branches in Kolhapur and
Sangli. In
August 1959, they were categorized as a “Scheduled Commercial Bank”
within the meaning of the Reserve Bank of India Act, 1934. Though RBL
has a 73-year operating history, they have transformed themselves in the
past 6 years from a traditional Bank into a ‘New
Age’ Bank while harnessing their heritage, relationships with customers
and domain strengths.
Mr. Narayan Ramachandran is a non-Executive, non-Independent
Director and the part-time Chairman of the Bank. He has wide experience
in the field of Finance and Banking.
Mr. Vishwavir Ahuja is the Managing Director & CEO of the
Bank. He has about 35 years of experience in the Banking and Financial
Services sector.
Mr. Rajeev Ahuja is the Head – Strategy, Retail, Transaction
Banking and Financial Inclusion, of the Bank. He has about 30 years of
experience in Investment Banking and Financial Markets.
Business Overview
RBL
Bank Ltd (“RBL”) is one of India’s fastest growing private sector banks
in the last six years. It offers a comprehensive range of banking
products and services
customized to cater to the needs of Large Corporations, Small and
Medium Enterprises (“SMEs”), Agricultural customers, Retail customers and Development Banking & Financial inclusion (low income) customers.
As
of March 31, 2016, RBL has 197 interconnected branches and 362
interconnected ATMs spread across 16 Indian states and union territories
serving over 1.9 million customers.
As
part of the growth strategy, RBL acquired certain Indian businesses of
the Royal Bank of Scotland (“RBS”), including the RBS’s Business
Banking, Credit Card and Mortgage Portfolio Businesses,
in Fiscal 2014.
Highlights during the period :
(Rs in Cr )
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FY2012
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FY2016
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CAGR (%)
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Total Income
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532.22
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3,234.85
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57.02%
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Other Income
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67.13
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490.54
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64.42%
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Net Profit after Tax
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65.10
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292.48
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45.59%
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Other Deposits
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4,739.33
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24,348.65
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50.55%
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Advances
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4,132.27
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21,229.08
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50.54%
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Brief Financial Details*
(Rs. In Crs)
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Particulars
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As at March 31,
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2013
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2014
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2015
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2016
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Share Capital
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252.93
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272.04
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293.45
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324.73
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Reserves
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1,352.73
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1,612.16
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1,935.95
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2,663.51
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Net Worth
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1,605.66
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2,013.70
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2,229.40
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2,988.24
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Interest Earned
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879.32
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1,351.62
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1,953.09
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2,744.31
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Other Income
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126.44
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260.97
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403.41
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490.54
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Total Income
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1,005.76
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1,612.59
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2,356.49
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3,234.85
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Total Income Growth (%)
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-
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60.34%
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46.13%
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37.27%
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Profit Before Tax
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137.01
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132.52
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299.94
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428.01
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Net Profit after Tax
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92.85
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92.67
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207.18
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292.48
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PAT as % to revenue
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9.23%
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5.75%
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8.79%
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9.04%
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EPS (Rs.)
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4.21
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3.63
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7.23
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9.60
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RoNW (%)
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5.78%
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4.60%
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9.29%
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9.79%
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NAV (Rs. per share)
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63.48
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74.02
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75.97
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92.02
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CAR (Capital Adequacy Ratio)(%)
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17.11%
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14.64%
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13.13%
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12.94%
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ROE (Return on Equity )(%)
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7.28%
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5.44%
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9.58%
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11.32%
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ROA ( Return on Assets) (%)
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1.05%
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0.66%
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1.02%
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0.98%
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NIM (Net Interest Margin) (%)
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3.18%
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2.68%
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3.01%
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2.96%
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Source: RHP
For additional information & risk factors please refer to the Red Herring Prospectus
Company
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RBL Bank Limited
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Profile
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RBL Bank Limited is
one of India’s fastest growing private sector banks in the last six years.
Bank has cultivated a customer centric culture where it use the
industry domain knowledge, experience and technology with the goal of
satisfying the client’s complete banking
needs. Bank offer a comprehensive range of banking products and
services customized to cater to the needs of large corporations, small
and medium enterprises (“SMEs”), agricultural customers, retail
customers and development banking & financial inclusion (low
income) customers. Bank have been expanding its presence across India
through a growing network of branches and ATMs and upgrading its
traditional delivery channels with modern technology-enabled channels
like phone banking, internet banking and mobile banking.
As of March 31, 2016, Bank had 197 interconnected branches and 362 interconnected ATMs spread
across 16 Indian states and union territories serving approximately 1.90 million customers.
Background
Bank
have a long history in India, with operations since 1943 when Bank was
incorporated as a small, regional bank in Maharashtra with two branches
in Kolhapur and Sangli.
In August 1959, Bank was categorized as a “scheduled commercial bank”
within the meaning of the Reserve Bank of India Act, 1934. Though the
Bank has a 73-year operating history, Bank has transformed itself in the
past six years from a traditional bank
into a ‘New Age’ bank while harnessing its heritage, relationships with
customers and domain strengths. Banks transformation commenced in 2010
during the difficult economic period following the global financial
crisis as well as the economic slowdown that
followed in India. Bank Board and management envisioned a
professionally governed and managed institution, built on the platforms
of knowledge, sector expertise and technology.
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Offer Period
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Offer Opens : Friday, August 19, 2016
Offer Closes : Tuesday, August 23, 2016
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Global Coordinators & BRLM
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Kotak / Axis/ Citi / Morgan Stanley
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BRLM
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HDFC Bank/ ICICI Sec/ IDFC Sec/ IIFL/ SBICap
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Price Band
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Rs.224/- to Rs.225/- per equity shares
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Bid Lot
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65 equity shares & multiple of 65 equity shares thereafter
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Issue Size overall
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Fresh Issue of Rs. 8,325 million and offer for sale of 1,69,09,628 equity shares
(Rs.1,211.3 crs @ lower price band & Rs.1,213.0 crs @ upper price band)
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Face Value:
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Rs.10/- each
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QIB (including Anchor)
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50% of the Offer (Rs.605.6 crs @ upper price band & Rs.606.5 crs @ lower price band)
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NIB
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15% of the Offer (Rs.181.7 crs @ upper price band & Rs.181.9 crs @ lower price band)
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Retail
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35% of the Offer (Rs.423.9 crs @ upper price band & Rs.424.5 crs @ lower price band)
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Mode of Payment
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ASBA Mandatory (No Cheque will be accepted)
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Registrar
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Link Intime India Pvt. Ltd.
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Listing
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NSE and BSE
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*Anchor bidding on 18th August 2016 Thursday.
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RBL Bank Limited
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Issue Date:19th Aug 2016 TO 23rd Aug 2016
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Price Band Rs. 224 /- To Rs. 225/- , Bid Lot 65 Shares
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Shares
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Rate
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Amount
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Shares
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Rate
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Amount
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65
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225
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14625
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520
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225
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117000
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130
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225
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29250
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585
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225
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131625
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195
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225
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43875
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650
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225
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146250
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260
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225
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58500
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715
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225
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160875
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325
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225
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73125
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780
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225
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175500
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390
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225
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87750
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845
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225
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190125
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455
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225
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102375
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RATNAKAR BANK LIMITED
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Name of Issuing Company:
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Lower Price Band (Rs.):
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Higher Price Band (Rs.):
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225
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Issue Start Date:
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19 Aug 2016
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Issue End Date:
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23 Aug 2016
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Lot Size:
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65
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ABOUT ISSUE:
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ISSUE DETAILS
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ISSUE HIGHLIGHTS
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OFFER STRUCTURE
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ISSUE BREAKUP
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Reservation for
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% of Issue
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`
In Crs.
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Price Band: ` 224 to
` 225
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Issue Size :
` 1212.97 Cr.
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Issuance
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No. of Shares
(In Cr.)
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QIB
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50
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606.48
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Issue Open on: August 19, 2016
Issue Closes on: August23, 2016
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No of Shares: 5,40,74,806
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Fresh Issue
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3.7
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Non-Institutional
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15
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181.94
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Offer for Sale
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1.7
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Net Offer
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5.4
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Retail
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35
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424.54
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Total
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100
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1212.97
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ABOUT COMPANY:
COMPANY OVERVIEW
Started
operations in 1943, when the bank was incorporated as a small regional
bank in Maharashtra with two branches in Kolhapur and Sangli. Today, RBL
Bank offers specialized
services under five business verticals namely: large
corporations, small and medium enterprises (“SMEs”), agricultural
customers, retail customers and development banking & financial
inclusion (low income) customers.
Much
of this transformation took place since 2010 and under this growth
strategy, RBL Bank acquired certain Indian businesses of the Royal Bank
of Scotland (RBS) in FY2014.
The acquisition included RBS’s business banking, credit card and
mortgage portfolio businesses. In the last six years, RBL Bank has
raised four rounds of funding and roped in several prominent investors
such as CDC Group, Asian Development Bank (ADB), International
Finance Corporation (IFC), Norwest Venture Partners (NVP), and domestic
private equity fund Faering Capital India.
HIGHLIGHTS
As of March 2016, RBL Bank has grown to a network of
201 branches and 365 ATMs across 16 Indian states and Union Territories serving approximately
1.9 million customers.
1.
Total income has grown at CAGR of 57.02% for the past four years.
2.
Net Profit has grown at CAGR of 45.59% for the past four years.
3.
Deposits have grown at CAGR of 50.55% for the past four years.
4.
Advances have grown at CAGR of 50.54% for the past four fiscal years.
Objects of the issue
1.
To augment the Bank’s Tier-I capital base to meet the Bank’s future capital requirements.
2.
Enhance their visibility and brand name among existing and potential customers.
3. General corporate purposes.
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OUTLOOK:
The
bank has consistently been growing its Net Income & Net Interest
Margins. Further, with an expanding reach
in rural market, it has enhanced its Brand image. The bank is planning
to grow more with the continuous improvement in modern technology and
operational scalability.
The return on Equity of the Bank is around 9% which is still quite low, however the trend is upwards. The
management of RBL has a rich experience and they have created an excellent platform to springboard into future growth.
Asking price of 225 at diluted EPS of 7.91 & P/ E of 28.45, the issue seem reasonably priced. Given the strong
management and improving balance sheet one can invest in the IPO for Medium to Long term.
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