RBL Bank to Raise ₹65 Billion Through Shares and Debt

RBL Bank, an Indian private lender, announced on Thursday that it plans to raise up to ₹65 billion (about $779 million) through a combination of qualified institutional placement (QIP) of shares and debt sale.

According to an exchange filing, the bank will raise ₹35 billion through QIP and ₹30 billion through the issue of debt securities via private placement.

This marks RBL’s first share issue via institutional placement since 2021. Back then, the bank experienced an abrupt management transition and increased scrutiny from the central bank, which temporarily appointed a director to its board due to concerns about a large amount of unsecured borrowing on its books.

The fundraising comes as RBL Bank aims for a 20% growth in its loan book over the next two financial years, driven mainly by an increase in secured retail assets. However, the bank did not specify how it would use the proceeds from the latest capital raise.

Indian banks have been strengthening their capital bases to meet the rising demand for loans. Other lenders, such as Punjab National Bank and State Bank of India, have also approved raising funds in recent months.

In the fiscal year 2024, RBL Bank reported a 20% growth in advances and a 22% growth in deposits. Ahead of the fundraising announcement, RBL Bank’s shares ended 2.1% higher.