Motilal Oswal's research report on RBL Bank
RBL Bank (RBK) reported 2QFY26 PAT of INR1.8b (5% miss), down 20% YoY, due to higher-than-expected provisions and lower other income. Emirates will invest USD3b to acquire a 60% stake in RBK through a preferential issue at INR280 per share, triggering an open offer for an additional 26% stake, potentially increasing its holding to 74% after the transaction, subject to regulatory and shareholder approvals. This strategic investment will enhance capital and strengthen ties between India and the UAE, and increase RBK's net worth to INR420-445b.
Outlook
Given the fund infusion from Emirates NBD expected in 1QFY27, we increase our earnings estimates by 19%/17% for FY27/28E. We estimate FY27/28E RoA of 1.2%/1.4%. Reiterate BUY with a TP of INR350 (premised on 1.3x FY27E BV).
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