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RBL Bank IPO chalks up 66% subscription on day 1

Equity Tips

The initial public offering of private sector lender RBL Bank garnered 66 per cent subscription today on the first day of the issue. This is the first initial share sale by any private sector lender in a decade. The public issue received bids for 2.51 crore shares as against 3.79 crore on offer, as per the information available with the stock exchanges till 17 hours. The quota reserved for retail investors witnessed a subscription of 87 per cent, while the high networth individuals (HNIs) portion subscribed 19.22 per cent. Besides, shares reserved for qualified institutional buyers (QIBs) saw a subscription of 66.22 per cent.

The anchor investors include FIL Investments Mauritius Ltd, Government Pension Fund Global, Goldman Sachs India Fund Ltd, Auburn Ltd and HSBC Global Investment Funds -- Indian Equity. Price band for the IPO is Rs 224-225 per share. The offers would close on August 23.

Yes Bank was the last private sector lender to hit the capital markets in 2005. Taking into account state-run banks as well, Punjab and Sind Bank last went public in India six years ago in 2010. Existing investors, including Beacon India Private Equity and GPE, would sell shares through the IPO.

The Kolhapur-headquartered RBL Bank had made a pre-IPO placement of 2.5 crore equity shares at Rs 195 per share last year to CDC Group, DVI Fund, Rimco and Asian Development Bank.

With the RBI announcing on-tap licences for full-fledged banks, the number of banks hitting the markets is bound to increase as the regulations call for mandatory listing within a defined time-frame. Kotak Mahindra Capital, Axis Capital, Citigroup, Morgan Stanley are global merchant bankers for the deal, while HDFC Bank, ICICI Securities, IDFC Securities, IIFL and SBI Caps are the lead managers for the local market.

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