RBL Bank Clears $1 Bn Foreign Bond Fundraising Plan

RBL Bank’s board on Monday approved the establishment of a $1 billion Euro Medium Term Note (EMTN) programme, allowing the private sector lender to raise funds through foreign-currency bonds, notes and other debt securities from overseas markets.

The programme will be established in accordance with Regulation S of the US Securities Act, 1933, subject to the required regulatory, statutory and other approvals, RBL Bank said in a stock exchange filing on September 7.

Under the programme, the bank can issue foreign-currency securities worth up to $1 billion from time to time through one or more transactions.

Any fundraising will be subject to prevailing market conditions and applicable regulatory requirements, the bank said.

The lender added that the securities will not be offered or sold to any investor in India.

RBL Bank’s board has also delegated certain powers and authorities to its Borrowing Committee, enabling it to take the necessary decisions and undertake actions related to the EMTN programme and the proposed issuances.

Emirates NBD Holds 60% Stake

The latest fundraising plan comes after Emirates NBD Bank completed the acquisition of a majority stake in RBL Bank in June through a preferential issue of shares.

Emirates NBD invested approximately $2.75 billion, or around ₹26,000 crore, in the transaction and now holds 60% of RBL Bank’s expanded share capital, as per PTI.

The transaction was described as the largest foreign direct investment (FDI) in the Indian banking sector and the largest equity fundraise in the sector.

The transaction also included a mandatory open offer to RBL Bank’s public shareholders, per PTI.

Citi Retains Buy Rating

Separately, global brokerage firm Citi has retained its ‘Buy’ rating on RBL Bank, with a price target of ₹440 per share, CNBC-TV18 reported.

Citi said RBL Bank has leveraged its promoter’s relationship with Emirates NBD to tap a large pool of FCNR(B) deposits from the UAE corridor.

According to the brokerage, the bank has mobilised gross FCNR(B) deposits of $3.4 billion, or around ₹32,472 crore, through the Reserve Bank of India’s swap facility, CNBC-TV18 reported.

Shares of RBL Bank ended at ₹415 apiece on the National Stock Exchange (NSE) on Monday.