Emirates NBD will acquire a controlling stake in RBL Bank through a USD 3 billion primary infusion, marking the largest FDI and equity raise in Indian banking. The investment, via a preferential issue of up to 60%, underscores ENBD’s commitment to India. Following this, ENBD will make an open offer to public shareholders for up to 26% stake. The deal, subject to regulatory approvals, includes the amalgamation of ENBD’s India branches into RBL Bank.
Strategic Investment Overview
Emirates NBD (ENBD) is set to acquire a controlling stake in RBL Bank through a primary infusion of approximately USD 3 billion (approximately INR 26,850 cr). This transaction represents the largest Foreign Direct Investment (FDI) and equity raise in the Indian banking sector to date. Both the Board of Directors of ENBD and RBL Bank have approved definitive agreements to proceed with this landmark acquisition.
Key Transaction Details
The proposed investment involves a preferential issue of shares up to 60%, subject to regulatory approvals and customary closing conditions. ENBD will also make a mandatory open offer to purchase up to 26% stake from public shareholders of RBL Bank, as per SEBI’s Takeover Regulations.
Amalgamation of India Branches
The Boards have also approved the amalgamation of ENBD’s India branches with and into RBL Bank, as required by RBI guidelines. This amalgamation is expected to be completed after the preferential issuance into RBL Bank.
Strategic Rationale
This investment reflects ENBD’s confidence in India’s fast-growing financial sector, aligning with the India-Middle East-Europe Economic Corridor (IMEC). The transaction aims to combine ENBD’s capital base with RBL Bank’s presence across India. The infusion will bolster RBL Bank’s balance sheet, enhance its Tier-1 capital ratio, and support branch network expansion.
Comments from Leadership
Mr. Shayne Nelson, Group CEO of Emirates NBD, stated, “Our investment in RBL Bank is a testament to our confidence in India’s vibrant and expanding economy… An enhanced presence in India for ENBD, through a well-established business like RBL Bank, would further complement ENBD’s service to customers operating throughout the MENATSA region.”
RBL Bank Chairman, Mr. Chandan Sinha said, “This partnership marks a defining moment in RBL Bank’s journey of transformation. The entry of Emirates NBD as our strategic shareholder reflects the global confidence in India’s banking sector and RBL Bank’s potential within it.”
Mr. R Subramaniakumar, Managing Director & CEO of RBL Bank, commented, “Welcoming ENBD as our new strategic partner is a significant milestone for the Bank. This partnership secures a robust and globally respected anchor shareholder, providing a strong capital base for our future.”
Source: BSE
