RBL bank IPO review


RBL bank, earlier name Ratnakar bank was established in 1943 and currently it is one of the fastest growing private banks. It provides customer centric solution for almost all segments of Indian market like large institutions, Small Entrepreneurs, Individuals, etc.

RBL boasts of robust management which took charge in 2010. The current MD and CEO of RBL bank is Mr. Vishwavir Ahuja. He previously served as MD and country CEO of Bank of America for the Indian subcontinent. Under his able and creative leadership, RBL has quickly transformed from a traditional bank to new age bank with usage of latest technology. In the last six years RBL has invested heavily in building strong banking platform.

RBL has a total business size of over Rs 31000 crore. It has around 201 branches and 365 ATMs across 16 States and Union Territories.

Issue Details

·         Issue date: 19th August 2016 to 23rd August 2016
·         Issue price: Rs 224 to Rs 225.
·         Face value of shares: Rs 10.
·         Market lot: 65 shares (in multiples of 65 thereafter).


Objective of Issue

The IPO consists of fresh issue of shares amounting to Rs. 832.50 crore and an Offer of Sale (OFS) of up to 1.69 crore shares by a couple of existing shareholders.


Financial details of company

Financial summary (in Crore Rupees)

FY 12
FY13
FY14
FY15
FY16
Net Interest income
186.8
257.5
341.6
556.4
819.2
Non Interest income
67.1
126.4
261
403.4
490.5
Operating profit
113.9
159.6
178.7
360.1
542.4
Net profit
65.1
92.9
92.7
207.2
292.5

As per experts at upper price band of Rs 225 per share , the RBL bank IPO is priced at 1.75x FY18E book value and 13.8x FY18E EPS.


Pros of company

1.    Aggressive credit growth with emphasis on asset quality.
2.    Increase in cost efficiency led by operational leverage.
3.    Strong Management team with vast experience.


Concerns with Company

1.    Inability to garner CASA growth in accordance with the strategy.
2.    Concentration of deposits exposes to liquidity risk.
3.    Higher sector exposure may lead to delinquency risk.
4.    Regional concentration in western and south-western India.


Final Verdict

This once in a decade IPO looks attractively priced and a good bet. RBL bank IPO is the first bank IPO after Yes Bank IPO in 2005. Major rating agencies have given a Subscribe rating to this IPO.


Disclaimer

The above mentioned analysis is as per my research. Before making any investment please consult your financial adviser and use your own analysis.

 First Edit : As expected the RBL IPO has garnered a great response and is subscribed over 69 times at the time of final closing on 23rd August. 

Comments

Post a Comment

Popular posts from this blog

Sovereign gold bonds scheme – complete analysis

Image
Dear Friends, You all should have heard about the current Sovereign Gold bond scheme going on for the current financial year 2016-17 (For latest details please visit my another post --> Link ).  SGB is available with tenure of 8 years with exit options available in 5 th , 6 th , 7 th year also. Let’s discuss about this scheme in detail. What is Sovereign gold bonds (SGB) scheme? SGB is a government security issued by Reserve Bank of India on behalf of Government of India . It is denominated in grams of Gold. You can buy from a minimum of 1 gram to a maximum of 500 grams. SGBs are simple and useful substitute of holding physical gold. Benefits of SGBs There are multiple benefits of investing in SGBs over holding physical gold. 1.     SGB is available both in paper as well as Demat format. 2.     Risk and cost of secured storage of physical gold is fully eliminated. 3.     No extra/hidden charges like making charges. 4.     No issue regarding
Read more

Decoding the components of Salary.

Dear Friends, When we are about to join a company, we all have those butterflies in stomach about the new company, new work environment, new manager, new colleagues, etc. With all these we also have some dreams about our salary and how much we will earn and how we will save/spend it. Today you will know what all components are there in our salary and how we can tweak it to get the maximum salary and least tax that too in completely legal way. In our offer letter , the total cost to company (CTC) is divided under various heads like Basic salary, Dearness Allowance (DA), House rent allowance (HRA), Leave travel allowance (LTA), Medical Allowance, Conveyance Allowance, Personal allowance, etc. First of all what is Salary? Salary is the payment of money that a person receives in lieu of the services rendered to another person/organization. In this case the person earning salary is called Employee and the person who gives salary is Employer. Salary word is derived fr
Read more

Income Tax filing made easy.

What is Income tax ? Income tax needs to be paid by every Individual, Hindu Undivided Family (HUF), Association of Persons (AOP), Body of Individuals (BOI), Corporate firms, Companies, and all other persons that generate income. Income Tax is calculated on the income of a person in a particular financial year i.e. from 1st April of a year to 31st March of next year. For example last financial year was from 1st April 2015 to 31st March 2016. Also known as FY 2016 or FY 2015-16. One more term is Assessment year. It is immediate next year for any financial year. For FY2015-16, Assessment year will be 2016-17. Income tax slabs for FY 2015-16 For Men Below 60 Years Of Age Income Tax Slab Income Tax Rate Income upto Rs. 2,50,000 Nil Income between Rs. 2,50,001 - Rs. 500,000 10% of Income exceeding Rs. 2,50,000 Income between Rs. 500,001 - Rs. 10,00,000 20% of Income exceeding Rs. 5,00,000 Income above Rs. 10,00
Read more