RBL Bank, ups and downs; an in-depth review…
RBL took the spotlight and became the talk of the town in the world of the stock market and investors around the end of the December quarter.
Everything went south when the Managing Director and the Chief executive officer of RBL Bank, Mr. Vishwavir Ahuja, suddenly left the firm following medical issues and other ailments. This is when prices of all the stocks fell, and RBL Bank was in troubled waters.
After they suffered an 18% drop, the shares of RBL Bank finally gained some momentum and were boosted by 3.36% since investors picked up the lower-priced stocks and raised their prices. As of the last quarter of December, the RBL Bank sold its individual scrip for Rs. 146, which was previously 140.9. Things were good for the company, and it held a promising future.
Standing at 362.9 crores, RBL was recognized as one of the most active stocks of the quarter. Shares of RBL Bank NSE 2.67 % reached 52-week lows just when the central bank accepted the designation of interim Managing Director & CEO of the bank, Mr. Rajeev Ahuja, over a tenure lasting for three months. “In this regard, we wish to inform you that Reserve Bank of India (RBI…has approved the appointment of Mr. Rajeev Ahuja as Interim Managing Director & CEO of the Bank for a period of three months with effect from December 25th, 2021, or till the appointment of a regular MD & CEO, whichever is earlier,” this is what the bank had to say in a regulatory filing in December.
Mr. Ahuja assumed the role of the MD and CEO as decided by the board in a few days.
RBL ended the year with a bang… On Thursday, they raised 2,600 crores via certificate deposits that created a buffer of additional liquidity against unforeseen withdrawals even though it had excess liquidity of 15,000 crores. This move was a clear demonstration of the confidence that the investors had in the bank.
The CDs are of two maturities – six months and 45 days. The bank sold a significant chunk of Rs 2,200 crore via six-month securities that yielded 5%. The other set of Rs 400 crore offered around 4 percent
RBL raised the CDs through seven primary transactions. Axis Bank CDs, rated A1+ and maturing on June 16th next year, changed hands Thursday at 4.20 percent in the secondary market.
Punjab National Bank, Union Bank of India, Bank of Baroda, and State Bank of India may have subscribed to the CDs, according to market sources. Earlier in February, the bank obtained a rating grade of A1+ from rating company ICRA to sell CDs.
The domestic equity market ended on a higher note in the last week of 2021 due to the all-around buying during the holiday-thinned trading. Let us look at how RBL Bank was performing during this time… the bank hit a snag following the duly intervention done by Reserved Bank of India. This caused the bank to write off loans worth 300 Crore under seven months of sanctioning them. The bank had its share prices fall down to 127.05 and a financial loss of 26%.
Let us conclude by looking at the current scenario of the bank and how it is performing today.
As of January 7th, RBL Bank has been banned from the F&O segment since they have crossed almost 95% of the market-wide position limit, which is set by the National stock exchange.
When asked about all these ups and downs, the bank mentioned that gross advances grew five percent year-on-year to Rs 59,941 crore as of December 31st, 2021. The bank also said it is a provisional figure for Q3FY22. The private sector lender had gross advances amounting to Rs 57,092 crore by the corresponding period a year ago.”