RBL Bank To Mull Fundraise On Oct 18 Amid Emirates NBD Stake Sale Speculations
RBL Bank Ltd. on Wednesday announced that it will consider raising funds in its scheduled meeting of the board of directors on Oct. 18, via issue of eligible securities of the Bank, as per an exchange filing on BSE.
Background of the Fundraise Plan
The announcement comes in the backdrop of speculations over the bank selling a majority stake to Emirates NBD. The Dubai-based lender is set to acquire around 60% stake in RBL Bank for approximately $3 billion, according to reports.
The transaction is expected to be announced soon, with sources suggesting that this will be done entirely using the fresh equity issuance route. The transaction will be carried out through the Indian wholly-owned subsidiary of Emirates NBD, after which it will be merged into RBL Bank.
Reserve Bank of India’s Stance
While the Reserve Bank of India has not budged on its 26% voting rights cap in this deal, it will likely allow Emirates NBD to acquire and keep its majority stake in RBL Bank, according to sources. Considering its dispersed ownership, Emirates NBD is confident that no major resolutions can be passed without the Dubai-based lender saying so.
Impact on RBL Bank’s Operations
Post the acquisition, RBL Bank will likely continue to host its current client base in the retail and medium, small and micro enterprises segments. Emirates NBD will help the lender develop cross-border financing and non-resident businesses through this transaction.
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Market Reaction
Shares of RBL Bank on Wednesday closed 2.76% higher at Rs 299.55 apiece on the NSE, compared to a 0.71% advance in the benchmark Nifty 50. The market reaction suggests that investors are positive about the potential acquisition and its impact on RBL Bank’s operations.
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Conclusion
In conclusion, RBL Bank’s plan to consider fundraise on October 18 has sparked speculations around Emirates NBD stake sale. The potential acquisition is expected to have a significant impact on RBL Bank’s operations and the Indian banking sector as a whole. Investors should stay updated on the latest developments and trends in the market to make informed investment decisions.
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