Mahindra group buys close to 5% stake in RBL Bank, shares jump

economictimes.indiatimes.com:

Mahindra group entity has acquired close to 4.9% stake in RBL Bank through open market route. Under RBI norms, if the shareholding of one company reaches 5% in a bank, the RBI’s approval is needed for any further stake buy. RBL shares were up 4%, trading at Rs 232 apiece on BSE.

Mahindra Group is present in financial services business through group company Mahindra & Mahindra Financial Services. In December 2021, amid concerns over RBL Bank's financial health, RBI had appointed its Chief General Manager Yogesh K Dayal as an additional director to RBL Bank's board while then CEO Vishwavir Ahuja went on a leave. Later the bank's board had appointed Rajeev Ahuja as the interim Managing Director and Chief Executive Officer.

Banking veteran R Subramaniakumar is the current Managing Director & CEO at RBL Bank. Prior to joining RBL Bank, he was the Managing Director & CEO and Board Chairman of Indian Overseas Bank. RBL Bank, which is listed on both BSE and NSE, has a pan-India presence with a network of over 500 branches.

In the June quarter, the private lender had reported a 43% jump in its net profit at Rs 288 crore, helped by core income growth. The lender reported a 21% jump in the core net interest income at Rs 1,246 crore on the back of strong growth in advances and expansion in net interest margin (NIM). The bank is also targeting to open about 70-75 branches this fiscal.

CEO Subramaniakumar said that the bank is gradually shifting away from bulk deposits to granular deposits, which will also help expand margins. He also said that RBL is not looking to raise equity capital now, but may tap the debt market for fundraising through Tier-II bonds later in the year. In 2021, the Reserve Bank of India revised guidelines in