This private banking stock outperformed all peers in 2025 with 100% rally. Do you hold it?

Indian private banking stocks staged a solid rebound in 2025, with the Nifty Private Bank index closing the year with a 16% gain after a muted performance in 2024. The rally also marked the index’s biggest annual rise since 2022.

Among the constituents, RBL Bank share price stood out, as it remained on an upward trajectory throughout the year and broke multi-year highs.

At the start of 2025, investors were cautious about a recovery in RBL Bank share price following its prolonged underperformance, with many choosing to exclude the stock from their portfolios amid doubts over a rebound.

However, those who continued to hold witnessed significant wealth creation, as RBL Bank’s share price delivered its biggest yearly jump in nine years amid multiple tailwinds, emerging as the front-runner among banking stocks in 2025.

Although RBL Bank’s share price began the year on a modest note, remaining range-bound in the first two months, it picked up steam in the following months and continued with the same momentum through year-end, translating into a multibagger rally of 100%.

This was also the biggest annual jump since the bank’s listing in 2016 and a complete turnaround from a 43% crash in 2024.

The rally also brought relief and boosted investors’ wealth, particularly those holding the majority 48.9% stake in the company at the end of the September quarter, according to BSE data.

RBL Bank 2025 Performance: Key drivers of the rally

Investor sentiment towards RBL Bank’s share price improved following the bank’s better financial performance in recent quarters, including improved asset quality. The rally received additional support after the announcement of a stake acquisition by Emirates NBD.

ENBD is set to acquire a controlling stake in RBL Bank through a primary infusion of approximately ₹26,850 crore, which is the largest-ever foreign direct investment in the Indian financial services sector, the largest equity fund raise in the Indian banking sector, and the largest fund raise via preferential issuance by a listed company in India.

The proposed investment will be made via a preferential issue of up to 60% and will be subject to regulatory approvals and other customary closing conditions. As part of this transaction, ENBD will also make a mandatory open offer for the purchase of up to a 26% stake from the public shareholders of RBL Bank, in accordance with SEBI’s Takeover Regulations.

Mutual funds boost stake in RBL Bank in Q2

Domestic mutual funds boosted their holdings in RBL Bank during the September quarter, with their collective stake rising to 30.6% from 29.19% in Q1FY26. Life Insurance Corporation (LIC) also added to its exposure, holding 1.26% at the end of Q2.

Foreign portfolio investors (FPIs), on the other hand, lowered their stake to 15.5% in Q2 from 17.6% in Q1 FY26, as per the BSE shareholding data.

Disclaimer: We advise investors to check with certified experts before making any investment decisions.