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What is the story about?
Shares of RBL Bank Ltd. are in focus on Tuesday, October 14, after a MoneyControl report on Monday, stated that the Middle East bank Emirates NBD is in advanced talks to acquire a majority stake in the lender.
The report stated that both parties have been in talks for the last few months and Emirates NBD is keen on picking up more than 51% stake in RBL Bank.
RBL Bank's current market capitalisation is at ₹17,800 crore, which implies the deal to be valued at more than ₹9,900 crore.
Earlier reports had indicated that Emirates NBD was in the fray for a stake in IDBI Bank, along with other suitors like Fairfax, Oaktree and Kotak Mahindra Bank.
RBL Bank is targeting its Return on Assets (RoA) to reach 1% by the end of the ongoing fiscal compared to 0.56% in the first quarter. It currently trades at a one-year forward price-to-book multiple of 1 times.
Voting rights for a single investor in a listed private bank cannot exceed 26% as per the current norms.
Any change in raising voting rights beyond 26% will require legislative changes, as this ceiling is prescribed in the Banking Regulations Act.
Such changes will be time consuming and will require the RBI to first make a formal recommendation, as per experts.
IDFC First Bank and Yes Bank have seen deals from foreign institutions recently.
While a Warburg Pincus unit, Currant Sea Investments BV, acquired a 9.99% stake in IDFC First, Sumitomo Mitsui Banking Corporation received approval from the Reserve Bank of India to increase its stake in Yes Bank to 24%.
Shares of RBL Bank Ltd. ended the previous session 0.8% lower at ₹289.2 apiece. The stock has gained 6.6% in the past month, 59.5% in the last six months and 83.3% this year, so far. The stock continues to remain in the Futures & Options (F&O) ban, which means no new positions can be created in the stock.
Also Read: LG Electronics India shares can rise 83%, Motilal Oswal projects in 'bull case' scenario
The report stated that both parties have been in talks for the last few months and Emirates NBD is keen on picking up more than 51% stake in RBL Bank.
RBL Bank's current market capitalisation is at ₹17,800 crore, which implies the deal to be valued at more than ₹9,900 crore.
Earlier reports had indicated that Emirates NBD was in the fray for a stake in IDBI Bank, along with other suitors like Fairfax, Oaktree and Kotak Mahindra Bank.
RBL Bank is targeting its Return on Assets (RoA) to reach 1% by the end of the ongoing fiscal compared to 0.56% in the first quarter. It currently trades at a one-year forward price-to-book multiple of 1 times.
Where do regulations stand?
Voting rights for a single investor in a listed private bank cannot exceed 26% as per the current norms.
Any change in raising voting rights beyond 26% will require legislative changes, as this ceiling is prescribed in the Banking Regulations Act.
Such changes will be time consuming and will require the RBI to first make a formal recommendation, as per experts.
Recent Banking Deals
IDFC First Bank and Yes Bank have seen deals from foreign institutions recently.
While a Warburg Pincus unit, Currant Sea Investments BV, acquired a 9.99% stake in IDFC First, Sumitomo Mitsui Banking Corporation received approval from the Reserve Bank of India to increase its stake in Yes Bank to 24%.
Shares of RBL Bank Ltd. ended the previous session 0.8% lower at ₹289.2 apiece. The stock has gained 6.6% in the past month, 59.5% in the last six months and 83.3% this year, so far. The stock continues to remain in the Futures & Options (F&O) ban, which means no new positions can be created in the stock.
Also Read: LG Electronics India shares can rise 83%, Motilal Oswal projects in 'bull case' scenario
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