RBL Bank completes Rs 1,566 cr fund raising through preferential allotment

Private sector lender RBL has completed its fund raising process, garnering Rs 1,566 crore through preferential allotment of shares. Baring Private Equity Asia, through its vehicle Maple II B.V., has invested Rs 999 crore and will hold 9.44 per cent in the lender.

ICICI Prudential Life Insurance has invested Rs 330 crore in the bank, while Gaja Capital, which has been an anchor investor in the lender since 2010, put in Rs 150 crore, and CDC Group, an RBL shareholder since March 2014, invested Rs 86 crore in the fund raising process.

With this fund raising, the lender’s capital adequacy has gone up to to 18.7 per cent, with Tier I at 17.4 per cent. Its net worth has risen to Rs 12,000 crore. Shares of the lender are trading at Rs 206.65 on the Sensex, up 1.61 per cent from the previous day's close.

RBL had posted a 165 per cent rise in net profit to Rs 144 crore in the second quarter ended September 2020 (Q2FY21) on higher net interest income (NII) and a dip in provisions and contingencies. Its NII grew seven per cent to Rs 932 crore and the Net Interest Margin was flat YoY at 4.34 per cent.

The gross non-performing assets (NPAs) rose to 3.34 per cent in September from 2.6 per cent in September 2019. The net NPAs declined to 1.38 per cent from 1.56 per cent. The provision coverage ratio (PCR) improved to 74.75 per cent in September 2020 from 58.45 per cent a year ago.

The lender will continue to be cautious. Balance sheet protection, capital preservation and risk mitigation will continue to be of paramount importance for the bank.