New Delhi: The initial public offering by RBL Bank kicked off on Friday, with the issue receiving bids for 66 per cent of the issue size by 5:30 pm on Day 1.
As per data available with BSE and NSE, investors bade for 2.5 crore shares against the total issue size of 3.79 crore shares. The issue was seeing a good response from retail individual investors (RIIs), who bade for 76 per cent of the quota limit in the initial hour. The quota for qualified institutional buyers (QIBs) was susbcribed 66 per cent. The issue will be closed on Tuesday next week.
The bank had on Thursday fetched Rs 364 crore by issuing shares to 28 anchor investors at the upper price band of Rs 225. Mutual funds applied for 63 lakh equity shares, which was 39.02 per cent of the total anchor portion, the bank said.
Experts noted that the bank has stayed away from stressed sectors such as steel, power and infrastructure, which has helped it to maintain its asset quality at better levels compared to peers.
This is despite 60 per cent of its loan exposure to corporates and MSMEs. Gross NPAs stand at 1 per cent of loans, while restructured book is small at 0.1 per cent of loans.
“Large asset quality shocks are unlikely though loan book growth has been high for the last 2‐3 years,” said brokerage Prabhudas Lilladher.
“The bank continues to focus on retail and working capital needs of corporate which will hold up asset quality and improve margins. Post issue, at upper band of Rs225, RBL trades at 2.1x FY16 ABV of Rs 108 (including dilution) which we believe is fully valued and should subscribe with long term view,” the brokerage said.
Net Interest Income (NII) for the lender grew to Rs 819.21 crore in FY16 from Rs 186.79 crore in FY12, which represents a CAGR of 44.71 per cent in the four year period. Between FY12 and FY16, the bank’s loan book, net interest income (NII), and net profit grew at a compounded annual rate of 40-50 per cent. It was able to sustain the growth momentum in FY16 as well.
Brokerage Monarch Networth said, “We expect strong growth rate to continue across its all business segments with deepening of customer relationships, opening of new branches and upturn of economic growth.”
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