RBL IPO arrives: expected to make a clean sweep

Well, RBL Bank is certainly making headwinds with the launch of its IPO, which has opened on Friday, Aug 19 for subscription. The issue will be closely watched as it is the first private sector bank's IPO after a decade. Earlier, the private sector lender, Yes Bank had come up with its IPO in early 2005. But the question which many will have in the mind is whether the IPO will be fully subscribed. Looking at the early trend of the IPOs of 2016, it can be seen that all IPOs have been oversubscribed, with the exception of L&T Infotech's IPO, which was listed at a discount.

RBL Bank plans to raise around Rs 1,215 crore through the initial public offer (IPO) at a price band of Rs 224-225. HDFC Bank, ICICI Securities, IIFL Holdings, SBI Capital Markets and IDFC Securities are the book running lead managers for the issue.

For the financial year ended March 31, 2016, the lender has reported a net profit of Rs 296.80 crore, up 42.38 per cent against Rs 208.45 crore in the corresponding quarter a year ago. The bank’s gross non-performing assets (NPA) stand at 0.77 per cent and 0.98 per cent for the financial years ended March 2015 and March 2016, respectively. Its net NPA stands at 0.27 per cent and 0.59 per cent as of March 31, 2015 and March 31, 2016, respectively.Issue will close on Aug 23, and is likely to be fully subscribed. Looking at the financial numbers, the only thing to worry about is the growing NPA issue, which the Indian banks are facing in congregation.