CARE Ratings has placed RBL Bank 's Tier II bonds rating of CARE AA- on Rating Watch with Positive Implications, following a significant investment proposal from Emirates NBD PJSC (ENBD). This rating action comes in response to ENBD's proposal to invest approximately ₹26,853 crore ($3 billion) through a preferential issue to acquire a 60% controlling stake in RBL Bank.

Key Highlights of the Proposed Transaction

• Investment Size: ₹26,853 crore ($3 billion) through preferential issue
• Stake Acquisition: 60% controlling stake in RBL Bank
• Additional Open Offer: Mandatory open offer for up to 26% additional stake
• Branch Amalgamation: ENBD's Indian branches to be merged with RBL Bank
• Total Expected Capital Infusion: ₹29,253 crore (including branch amalgamation)

Impact on RBL Bank's Financial Position

The proposed transaction is expected to significantly bolster RBL Bank's financial position:

Current Financial Snapshot (as of September 30, 2025)

Rating Rationale

CARE Ratings has highlighted several factors influencing its decision to place RBL Bank's ratings on watch with positive implications:

1. Capital Infusion: The substantial capital infusion is expected to significantly improve the bank's capitalization profile.
2. Operational Scale: The investment could enable RBL Bank to scale up its operations across various business segments.
3. Asset Quality: While there has been a gradual improvement in asset quality, the unsecured lending segment remains a concern.
4. Profitability: The bank's profitability remains moderate, impacted by a high cost-to-income ratio and elevated credit costs.
5. Deposit Profile: RBL Bank continues to have a relatively high dependence on bulk deposits, although efforts are being made to increase retail deposits.

Outlook and Monitoring

CARE Ratings will continue to monitor the progress of the proposed transaction and its impact on RBL Bank's business and financial profile. The rating agency will also assess ENBD's business plan for RBL Bank before resolving the rating watch.

Regulatory Approvals

The proposed transaction is subject to regulatory and shareholder approvals, which will be crucial for its completion.

As RBL Bank navigates this potentially transformative phase, the banking sector will be watching closely to see how this significant foreign investment shapes the competitive landscape of Indian private sector banking.

RBL Bank has announced that Emirates NBD Bank (P.J.S.C.) is seeking to acquire a controlling stake in the Indian private sector bank. This development comes as RBL Bank aims to raise its foreign direct investment (FDI) limit to accommodate the proposed investment.

Key Highlights of the Proposed Deal

Open Offer Details

Emirates NBD has launched an open offer to acquire up to 415,586,443 equity shares of RBL Bank, representing 26% of the expanded voting share capital, at ₹280.00 per share. The total consideration for the open offer amounts to ₹116,364.20 crores, assuming full acceptance.

Investment Structure

The proposed investment is structured in two parts:

1. A preferential allotment of 959,045,636 equity shares at ₹280.00 per share, totaling ₹268,532.78 crores.
2. An open offer for an additional 26% stake.

If fully subscribed, this combined transaction would give Emirates NBD control of RBL Bank with a shareholding between 51-74% of the total paid-up share capital.

Offer Price Considerations

The offer price of ₹280.00 represents the highest negotiated price under the investment agreement and is above the 60-day volume weighted average market price of ₹270.97.

Regulatory Approvals

The transaction is subject to various regulatory approvals, including:

• Reserve Bank of India (RBI)
• Competition Commission of India
• Department for Promotion of Industry and Internal Trade (DPIIT)

RBL Bank plans to approach the DPIIT to increase its FDI ceiling from the current 49% to 74%, which is crucial for facilitating Emirates NBD's proposed controlling stake.

Strategic Implications

This significant capital infusion aims to provide RBL Bank with the necessary resources to:

• Expand its corporate lending operations
• Enhance its retail business segments
• Strengthen its digital payments ecosystem
• Broaden its distribution network

Emirates NBD intends to operate in India through RBL Bank as a subsidiary and plans to amalgamate its existing India branch operations with RBL Bank.

Upcoming Shareholder Meeting

RBL Bank has announced an Extraordinary General Meeting to be held on November 12, 2025, at 11:30 am (IST) at Residency Club, Kolhapur. This meeting is crucial for obtaining shareholder approval for the proposed changes in the bank's FDI structure.

Investor Engagement

The bank's management is actively engaging with investors and analysts to discuss its growth strategies. A recent one-on-one meeting with FSSA Investment Managers, held via video conferencing in Mumbai on October 27, 2025, indicates ongoing investor interest in RBL Bank's plans.

This development represents a significant milestone in India's banking sector, potentially setting a precedent for future foreign investments in the country's financial institutions. Stakeholders will be closely watching the regulatory approval process and the subsequent steps in this landmark transaction.