RBL Bank lists at 22% premium over issue price

Lists at Rs 274 on the National Stock Exchange (NSE), a 22 per cent premium over its issue price of Rs 225

The line-up of companies with a healthy showing on listing day seems to be increasing. On Wednesday, RBL Bank shares listed at Rs 274 at the start of trade on National Stock Exchange, a 22 per cent premium over its issue price of Rs 225 per share. The stock hit an intraday high of Rs 305 before closing at Rs 299.95, a day-one gain of 33.3 per cent over the issue price.

RBL is not the only firm to make a stellar debut this year. Eleven of the 16 firms that listed this year have ended with double-digit day-one gains between 10 and 59 per cent.

"Over the last few months, there has been a latent demand for IPOs and good companies priced at reasonable valuations are finding takers among all sets of investors, institutional (big money) as well as individuals," said Dara Kalyaniwala, head, investment banking, Prabhudas Lilladher.

Wealthy individuals, in particular, have taken a liking to recent initial public offerings (IPOs) of shares, buoyed by healthy listing gains in some recent ones. Prime Database shows non-institutional portion of seven of 16 issues this year was subscribed more than 100 times.

“Recent IPOs are leaving enough money on the table for investors. This has created sizable demand for new offerings,” said Prasanth Prabhakaran, head, retail broking, IIFL.

Interestingly, there has been a healthy appetite for companies from new segments. This includes staffing companies such as TeamLease and Quess Corp, as well health care firms such as Dr Lal PathLabs, Alkem Laboratories, and Narayana Hrudayalaya.

“There is ample liquidity in the market. Investors are booking profits in listed companies and reinvesting the money in debutants,” said Kalyaniwala.  

The Rs 1,200-crore initial public offering (IPO) of RBL Bank — the first by a private sector lender in a decade — was subscribed 70 times. The IPO had generated a demand worth over Rs 59,000 crore, among the highest in recent times, as it attracted bids from all three categories of investors.

"The banking sector is facing growth pangs. Despite that, RBL has been able to show growth without compromising asset quality. Investors have also shown faith in the bank's management and execution track record," Subhrajit Roy, executive director, Kotak Investment Bank, had said.