Emirates NBD Bank PJSC, a Dubai government-owned entity, is contemplating acquiring a significant minority stake in RBL Bank to expand its footprint in Asia.
They noted that the investment via a preferential allotment is expected to be a significant capital enhancement for the Indian private sector lending bank.
The shares of the well-known Indian private bank jumped over 4 percent, signaling a rise for the fourth consecutive session.
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Its shares have jumped more than 21percent in the past month and over 64percent in the last six months. It has risen by over 7 percent in the past five days. On Tuesday, it closed at Rs 259.95 on the BSE, increasing by 4.6 percent, resulting in a market capitalization of Rs 15,831.21 crore.
The arrangement of the agreement will be similar to the recent deal between SMBC and Yes Bank, as per the cited sources.
In this situation, the UAE bank is anticipated to hold around 15-20% of the raised equity capital base, which stays within the open offer threshold, subject to regulatory approvals.
This would amount to an investment of Rs 3,166.24 crore. One source indicated that the deal is anticipated to take place at a price above the existing one.
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The stock, which recorded gains in seven out of the past eight sessions, is still trading slightly below its book value, making it one of the cheapest in the sector, analysts said. It currently has a P/E ratio of over 21.