RBL Bank IPO gets subscribed 66% on Day 1

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New Delhi: RBL Bank Ltd, the country’s first private-sector bank to go public in more than a decade, saw its Rs.1,211 crore initial public offering (IPO) subscribed 66% on the first day, data from the National Stock Exchange showed.

The issue saw the portion reserved for qualified institutional buyers (QIBs) subscribed by 66.22%.

The retail portion was subscribed 87%, while the portion for high net-worth individuals (HNIs) saw a 19.22% subscription. The issue will close on 23 August.

In the grey market, the demand was active and the shares were traded at a premium of Rs.40-50 per share, two dealers said requesting anonymity.

“This issue is seeing good demand. Currently, there are deals happening at 20% premium. It may rise over the next couple of days if the demand continues to be high,” one of the dealers cited above said.

RBL Bank on Thursday raised Rs.363.88 crore by selling shares to anchor investors ahead of its three-day IPO.

The anchor book is that portion of an IPO which bankers allot to institutional investors on a discretionary basis.

Anchor book subscription opens a day before the IPO launch and is an indicator of institutional investor interest.

In a note on 18 August, brokerage Prabhudas Lilladher Pvt. Ltd said RBL Bank continues to focus on retail and working capital needs of corporates which will hold up asset quality and improve margins.

According to Prabhudas Lilladher analysts, post issue, at the upper band of Rs.225, RBL trades at 2.1 times fiscal 2016 average book value, which the brokerage believes is fully valued, advising investors to subscribe with a long-term view.

Before RBL, the last private sector bank to launch an IPO in India was Yes Bank Ltd, which raised Rs.315 crore in July 2005. In 2010, state-owned Punjab and Sind Bank Ltd managed to raise Rs.480 crore through its IPO.