RBL Bank shares in focus as M&M sells entire 3.45% stake via Rs 678 crore block deal: Report

Shares of RBL Bank Ltd will be in focus heading into trade on Thursday, November 6, after a large block deal was executed on the bourses, according to a CNBC-TV18 report citing sources. Mahindra & Mahindra (M&M) is the likely seller, offloading its entire 3.45% stake in the private lender for about Rs 678 crore through the block deal, the report said. The floor price for the sale is pegged at Rs 321 per share.

M&M had invested Rs 417 crore in July 2023 to acquire the stake at Rs 197 per share. The transaction would therefore yield a 63% return for the automaker. Soon after the initial investment, M&M managing director Anish Shah had clarified that the company did not plan to raise its holding in RBL Bank beyond 9.9% unless there was a compelling investment rationale.

“There is no intention of going further at this point. But it helps us understand the sector a lot better to enhance the value of a business that is nearly a Rs 40,000 crore market capitalisation,” Shah had said then.


Separately, RBL Bank announced a strategic investment by Emirates NBD, which will acquire a 60% stake in the lender through a preferential equity issue worth Rs 26,853 crore (around $3 billion) at Rs 280 per share. The bank’s board has approved the issue and allotment of 96 crore new shares to the Dubai-based banking group.

The transaction marks several milestones — it is the largest-ever foreign direct investment (FDI) in India’s financial services sector, the biggest equity fundraise by an Indian bank, the largest preferential issue by a listed company, and the first instance of a foreign bank acquiring a majority stake in a profitable Indian private sector lender.

As per regulatory requirements, Emirates NBD will also make a mandatory open offer to acquire up to an additional 26% stake in RBL Bank at the same price. Both boards have approved the amalgamation of ENBD’s India branches with and into RBL Bank, subject to the Reserve Bank of India’s approval. Once completed, Emirates NBD will become the promoter of RBL Bank and will have the right to nominate directors to its board.

Shares of RBL Bank ended Tuesday’s session at Rs 322, down 2% from the previous close on the NSE. The stock has surged 104% on a year-to-date basis.

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