Private sector lender RBL Bank Ltd is most likely to raise up to Rs 2,000 crore via a qualified institutional placement (QIP) offering, said sources.
“The bank has appointed ICICI Securities, IIFL Securities and IDFC Securities as advisers to the transaction. The roadshows have already happened in the US, Europe and Asia markets and the timing of the QIP launch will be decided soon,” said a person aware on the development.
“The bank is in the process of negotiating with some marquee investors and may go for a preferential issue if the talks fructify.”
QIP is a tool that is used by listed companies for selling shares, debentures, or securities, apart from warrants that can be converted into stocks, to a qualified institutional buyer for example mutual funds and foreign institutions.
The update is followed by the RBL Bank announcement to shareholders during its annual general meeting dated on 9 July that it would raise equity capital not more than Rs 3,500 crore. The bank had a capital adequacy ratio of 12.3 percent as of 30 September, falling from 13.7 percent in the last fiscal.
In between July-September, the bank’s asset quality also went down as its gross bad loans jumped 95 percent to Rs 1,539 crore from Rs 789.21 crore in the corresponding period last year. As a percentage of total loans, its gross bad loans ratio nearly multiplied to 2.6 percent from 1.38 percent in the period while profit fell 73 percent to RS 54 crore.
This put the lender’s stock under pressure as it tanked from a 52-week high of Rs 716.40 on NSE in May in 2019 to a 52-week low of Rs 230.55 on 23 October.