RBL Bank shares in focus as UAE's 2nd largest lender looks to buy 51% stake

Shares of RBL Bank Ltd are in focus on Tuesday amid media reports suggesting the UAE’s second-largest lender, Emirates NBD Bank, is in advanced discussions to inject Rs 15,000 crore or approximately $1.7 billion into RBL Bank, with the intention of becoming its single largest shareholder and taking control with a 51 per cent stake. 

The proposed investment is expected to be executed via a preferential allotment of shares and warrants, followed by an open offer for an additional 26 per cent, The Economic Times reported. All of which would be primary capital infusion to help bolster RBL’s balance sheet. 

If approved, Emirates NBD would emerge as a controlling shareholder in the enlarged equity base of RBL Bank. 

As per the report, the Reserve Bank of India (RBI) has already granted in-principle approval for the change of control. This deal will significantly expand Emirates NBD’s presence in Asia and strengthen its position in the India–Middle East remittance corridor, The Economic Times reported.

RBL Bank, currently fully publicly owned, is planning a board meeting on October 18 to approve its Q2/H1 results. A formal announcement of the deal might be made then or earlier, the report suggested.  

The bank had previously denied earlier reports of a foreign investment but maintained that it continuously evaluates strategic growth options. Financial and legal advisory is said to be provided by EY and JPMorgan in this transaction. 

If successfully closed, this would rank among the biggest mergers and acquisitions in India’s banking sector, underscoring strong foreign interest in India’s private banking and shadow lending segments.