UAE's Emirates NBD to Launch Open Offer for RBL Bank on Dec 12; Shares Trade Higher

UAE-based lender Emirates NBD will launch an open offer to buy public shares of India’s RBL Bank on December 12, the latter disclosed in an exchange filing on Thursday. The offer follows RBL Bank’s board approval last month of a ₹26,853 crore deal with the Dubai-headquartered bank.

Under the deal, Emirates NBD will hold a 60% stake in RBL Bank, marking the largest foreign acquisition in India’s financial sector to date.

The period for tendering public shares will close on December 26, according to the latest exchange filing.

The stake purchase involves a combination of preferential allotment and an open offer to existing investors. The open offer is priced at ₹280 per share, according to Emirates NBD and RBL’s earlier announcement, while RBL shares closed at ₹324 on Tuesday. Indian markets remained shut on Wednesday.

On Thursday, the lender’s shares opened about 2% higher and were trading in the green, up nearly 1% at ₹326.40 per share on the BSE at 9:42 a.m.

The gains are also being attributed to a block deal in which Mahindra & Mahindra (M&M) reportedly sold its entire 3.45% stake in the private lender for around ₹678 crore. Reports on Wednesday had indicated that M&M was preparing the sale via block deals.

Data showed that around 2.11 crore RBL Bank shares, equivalent to 3.45% of the bank’s equity, were traded at ₹321 per share, with Kotak Securities acting as the broker. M&M had initially invested ₹417 crore in July 2023 to acquire a 3.5% stake at ₹197 per share, earning an approximate 64% gain from the sale.

At the time of investment, M&M Managing Director and CEO Anish Shah had said the company had no plans to increase its holding further, noting that the move was aimed at better understanding the financial sector and enhancing the value of its ₹40,000-crore business.

Emirates NBD’s acquisition of RBL Bank comes as India’s BFSI sector witnesses a surge in foreign investments and takeovers. India allows up to 74% foreign ownership in private banks but caps any single foreign entity’s holding at 15% unless the Reserve Bank of India grants a waiver. Reports suggest that the RBI has informally conveyed its support for the Emirates NBD deal.

The proposal follows Japan’s SMBC acquiring a 24.9% stake in private sector Yes Bank for a total investment of ₹16,333 crore.