Diwali Deal in the Making: Emirates NBD poised to acquire controlling stake in RBL Bank

Emirates NBD is eying a 60% stake in Mumbai-based private lender RBL Bank, after factoring in the mandatory open offer, sources with knowledge of the matter told CNBC-TV18.

The pricing of the transaction is likely to be calculated as per the SEBI formula and may not be with a significant premium to the lender's current market price.

Emirates NBD is likely to acquire shares through a fresh equity issuance to its wholly-owned subsidiary, which would mean that the entire investment will be directly infused into RBL Bank by Emirates NBD.

The deal, which is likely to be announced in the coming few days, has received informal approval from the Reserve Bank of India (RBI) for a change of control, as per people in the know.

Formal submissions to the regulator will follow once both RBL Bank and Emirates NBD complete their internal board approvals, it is understood. While the RBI is not expected to relax the 26% voting rights cap, sources suggest the regulator may offer a glide path to Emirates NBD, allowing it to gradually bring down its shareholding in RBL Bank.

RBL Bank’s foreign shareholding currently stands at about 22.6%, including 17.6% held by FPIs, 3.5% by Foreign Corporates and another 1.5% by NRIs, the company’s latest disclosures showed.

However, since the acquisition will be executed via a fresh equity issue, Emirates NBD’s majority holding will not breach the 74% foreign investment cap applicable to Indian private banks, explained another person familiar with the transaction. That’s because the fresh equity issuance to Emirates NBD would expand the overall capital base and remain within regulatory FDI limits.

The total foreign shareholding in an Indian private bank is capped at 74%. As per RBI’s directions, a promoter’s voting rights are limited to 26% by the Banking Regulation Act. There is also a specific limit of 15% for a financial institution to hold a strategic stake, and 10% for individuals/ non-financial institutions, though Governor Sanjay Malhotra has publicly stated that RBI is reviewing these rules.

If completed, the transaction will mark the largest single foreign direct investment (FDI) in India’s banking industry. It also comes months after the RBI granted Emirates NBD in-principle approval in May 2025 to establish a wholly owned subsidiary in India.

The UAE bank, which counts the Investment Corporation of Dubai and Dubai Holding among its major shareholders, reported total assets of AED 997 billion and a profit of AED 6.7 billion as of December 2024.

RBL Bank, meanwhile, reported a net profit of ₹200 crore in the first quarter of FY26, even as its net interest income fell 13% year-on-year to ₹1,481 crore. Its advances grew by 9%, while deposits rose 11% during the same period.

For Emirates NBD, which already operates in India through its Mumbai branch, this acquisition could significantly deepen its footprint in one of the world’s fastest-growing banking markets. For RBL Bank, a partnership with a globally recognised institution could provide much-needed capital support and strategic direction at a time when the mid-sized private lender is looking to expand its secured retail and MSME lending portfolio, particularly in India’s smaller cities.

CNBC-TV18 has reached out to both RBL Bank, and Emirates NBD, and their responses were awaited at the time of publishing this. The story would be updated if their responses are received.

Shares of RBL Bank are trading 1.2% higher at ₹295. The stock is up nearly 87% so far in 2025, making it the best performing Indian banking stock this year. This is also the best calendar year that the stock has had in terms of returns, since its listing in 2016.

The stock though, continues to be in the Futures & Options (F&O) ban, which means no new positions can be created in the stock.