RBL Bank shares zoom 6% on multiple block deals; pre-IPO lock-in period ends

RBL Bank shares rallied more than 6 percent intraday Tuesday on multiple block deals after the lock-in period for shares allotted in pre-IPO placement ended. The rally in the stock was despite sharp fall in equity benchmarks.

Nearly 2 crore shares (representing more than 5 percent equity) changed hands in two block deals on BSE in the price range of Rs 515-516 per share.

The lock-in period of one year for shares allotted to institutional investors in pre-IPO placement is ended.

According to experts, the stock is trading at higher multiples due to its strong loan growth and better asset quality compared to peers.

In the quarter ended June 2017, bank's loan growth stood at 40 percent and gross non-performing assets at 1.46 percent while its peers Federal Bank reported 30 percent loan growth & gross NPAs of 2.42 percent, and DCB Bank 22 percent & 1.74 percent, respectively. IDFC Bank's loan growth was at 23.5 percent and gross NPA at 4.10 percent.

The stock had listed with 22 percent premium on August 31, 2016 and rallied 140 percent from the issue price of Rs 225. RBL Bank (former Ratnakar Bank) raised more than Rs 1,200 crore through IPO.

Recently the bank raised Rs 1,680 crore by selling 3.26 crore shares for Rs 515 per share on a preferential basis to marquee investors, including CDC Group, Multiples Alternate Asset Management, HDFC Standard Life Insurance Company, Global IVY Ventures, ICICI Lombard General Insurance Company etc.

The National Stock Exchange announced the change in the constituents of indices on Monday. It added RBL Bank in Nifty Midcap 50 and Private Bank indices which will be effective from September 29.

At 12:30 hours IST, the stock price was quoting at Rs 534.50, up Rs 23.85, or 4.67 percent on the BSE.