RBL Bank raises ₹675 crore via preferential issue

Mumbai: Private sector lender RBL Bank on Tuesday said it has raised ₹675.8 crore through a preferential allotment of 1.98 crore equity shares at a price of ₹340.70 per share from four investors, the bank said in a statement.

With the preferential allotment and the qualified institutional placement (QIP) offering earlier in December, the bank has raised a total of ₹2,701 crore as part of its fundraising plans.

QIP is a tool used by listed companies to sell shares, debentures, or any other security, other than warrants that are convertible into stocks, to qualified institutional buyers such as mutual funds and foreign institutions.

The total capital raises the lender’s capital adequacy ratio -- its total capital in comparison to its risk weighted assets and current liabilities to 16.31%. That is against the minimum regulatory requirement of 9%. The bank had a capital adequacy ratio of 12.3% as on 30 September, a drop from 13.7% in the year-ago period.

Investors that participated in the preferential allotment included East Bridge Capital Master Fund I Ltd, FEG Mauritius FPI Ltd, Ishana Capital Master Fund and Ward Ferry Management Ltd-managed hedge fund WF Asian Reconnaissance Fund Ltd.

The bank’s board approved the preferential allotment in its extra-ordinary general meeting held on 27 December.

While the preferential allotment was made to investors at the issue price of ₹340.70 per share, the QIP was done at the issue price of ₹351 per share pursuant to the allotment of 5.77 crore equity shares on 6 December.

On Tuesday, RBL’s shares closed at ₹344.65 on the BSE, down 0.13% from the previous day’s close.

These fundraising exercise follows RBL Bank’s announcement to shareholders at its annual general meeting on 9 July that it would raise equity capital not exceeding ₹3,500 crore.

Between July and September, the bank’s asset quality had also worsened with gross non-performing loans increasing to ₹1,539 crore, from ₹789.21 crore in the corresponding period of last year.

As a percentage of total loans, the lender’s gross bad loans ratio nearly doubled from 1.38% to 2.6% in the period under consideration, while profit fell 73% to ₹54 crore. This put the bank’s stock under pressure as it tanked from a 52-week high of ₹716.55 on the National Stock Exchange on 28 May to a 52-week low of ₹230.55 on 23 October.