RBL Bank Block Deal: EQT Sells ₹1,100 Crore in Equity

On July 25, a block deal resulted in the sale of up to a 7.95% stake in RBL Bank on the exchanges. This transaction, valued at ₹1,100 crore, is believed to have involved the exit of private equity firm EQT (formerly Baring PE Asia) from the bank.

Post-deal, RBL Bank's shares dropped over 3% in trading. In early Thursday deals, the bank's shares fell 4% amid reports of the ₹1,100 crore block deal.

Approximately 4.8 crore RBL Bank share price were traded at an average price of ₹229.50, representing a 3.5% discount to the previous closing price.

While the exact identities of the buyers and sellers were not immediately confirmed, CNBC-TV18 reported on July 24 that Baring PE, through its vehicle Maple II BV, planned to sell 4.78 crore shares or a 7.9% stake in the bank. This sale aimed to facilitate Baring PE's exit from RBL Bank, generating ₹1,080 crore from the stake.

The stake sale also triggered a surge in trading volumes, with 5 crore shares changing hands on the exchanges, significantly higher than the one-month daily traded average of 64 lakh shares.

Earlier this week, RBL Bank reported a 28.95% year-on-year increase in net profit, reaching ₹371.52 crore for the April-June quarter of FY25. The bank's total income also grew by 21.47% to ₹4,301.70 crore in Q1 of FY25. Additionally, net interest income rose by 20% to ₹1,700 crore in the same quarter.

The private lender reported a standalone net profit increase of 28.95%, reaching ₹371.52 crore in Q1 FY25, compared to Q1 FY24. Total income rose by 21.47% to ₹4,301.70 crore in the same period. The profit before tax for June 2024 was ₹492.79 crore, a 29.24% increase from the ₹381.3 crore reported in Q1 FY24. The operating profit for the quarter ending March 2024 was ₹859 crore, marking a 33% rise from the ₹647 crore recorded in Q1 FY24.

Provisions (excluding tax) and contingencies saw a year-on-year increase of 37.60%, reaching ₹366.29 crore during the quarter. Regarding asset quality, gross non-performing assets (NPAs) were ₹2,378 crore as of June 30, 2024, slightly down from ₹2,404 crore as of June 30, 2023. The gross NPA ratio improved to 2.69% as of June 30, 2024, compared to 3.22% as of June 30, 2023. The net NPA ratio also improved, standing at 0.74% as of June 30, 2024, down from 1% as of June 30, 2023.

RBL Bank also announced plans for a ₹3,500 crore Qualified Institutional Placement (QIP) and a ₹3,000 crore issuance of debt securities through private placement.

These fundraising efforts come as the bank aims for a 20% growth in its loan book over the next two financial years, driven primarily by an increase in secured retail assets. However, the bank did not specify how it would utilize the proceeds from this fundraising.

Technically, RBL Bank's relative strength index (RSI) is at 38.3, indicating it is neither overbought nor oversold. The bank's shares are currently trading below their 5-day, 10-day, 50-day, 100-day, 150-day, and 200-day moving averages.