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To augment its capital base as per Basel III norms besides funding future business growth, RBL Bank has come out with an initial public offering (IPO) which is a combination of a fresh issue of shares and an offer-for-sale by existing investors.
The IPO consists of a fresh issue of shares totalling up to Rs 832.5 crore besides an OFS of up to 16909628 shares by a few selling shareholders.
The price band for the IPO has been fixed between Rs 224 and Rs 225 per equity share.
The Bank made a pre-IPO placement of 25,000,000 equity shares to the following investors at a price of Rs. 195 per equity shares: CDC Group PLC (1,600,000 equity shares), DVI Fund (Mauritius) Limited (3,690,231 equity shares) and Rimco (Mauritius) Limited (3,301,521 equity shares) on October 31, 2015; and to Asian Development Bank (14,350,000 equity shares), CDC Group PLC (680,682 equity shares) and DVI Fund (Mauritius) Limited (1,377,566 equity shares) on December 16, 2015.
The shares would be listed on the BSE and the NSE. The book running lead managers to the issue are Kotak Mahindra Capital Company, Axis Capital, Citigroup Global Markets India, Morgan Stanley India, HDFC Bank, ICICI Securities, IDFC Securities, IIFL Holdings and SBI Capital Markets.
Securities market regulator SEBI had issued a show cause to RBL based on the bank’s disclosures in the draft red herring prospectus. The notice said that RBL had made four preferential allotments of 18.19 lakh shares to 4892 investors raising Rs 18.18 crore. The bank was also found to have raised 601.12 crore from 12285 investors through rights issues in five instances with the number of investors in each of these rights issues being greater than 49. SEBI found this to be a violation of its disclosure and investor protection guidelines besides its IPO norms (issue of capital and disclosure requirements).
The case was settled through the consent mechanism on May 30, 2016 with the bank paying settlement charges of Rs 47.6 lakh to SEBI besides providing an exit option to all investors who participated in rights issues. In addition, the bank applied to the Registrar of Companies for compounding of violations of provisions under the Companies Act in respect of these allotments and paid compounding fee of Rs 10 lakh as ordered by the company law board on May 18, 2016.
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