Emirates NBD gets ready with $1.7 billion cheque for RBL Bank
October 13, 2025
Emirates NBD Bank is in advanced talks to invest Rs 15,000 crore in RBL Bank, aiming to become its largest shareholder with a 51% stake. The deal, pending RBI approval, will expand the UAE bank's Asian footprint and tap into the India-Middle East remittance market. RBL Bank's share price has surged in anticipation of this significant foreign investment.
Synopsis
Emirates NBD Bank is in advanced talks to invest Rs 15,000 crore in RBL Bank, aiming to become its largest shareholder with a 51% stake. The deal, pending RBI approval, will expand the UAE bank's Asian footprint and tap into the India-Middle East remittance market. RBL Bank's share price has surged in anticipation of this significant foreign investment.
Emirates NBD Bank PJSC, the second-largest bank in the UAE, is in advanced negotiations with RBL Bank to finalise a Rs 15,000 crore ($1.7 billion) investment in the private lender and emerge as the single largest and controlling shareholder, said multiple people involved.
The investment is said to be in the form of preferential allotment of equity shares and warrants to be followed by an open offer for an additional 26% stake. The entire investment will be through primary infusion of capital to help recapitalise the bank. The current market capitalisation of RBL Bank is Rs 17,786.79 crore. Upon completion, Emirates NBD is expected to end up owning 51% of the expanded equity capital base. One of the sources mentioned above said the banking regulator RBI has in recent weeks given its in principle approval for the change of control.
The transaction, expected to be announced this month, will expand its footprint in Asia and help make a strong play for the high growth India-Middle East remittance market. Indian migrants in the Gulf Cooperation Council (GCC) countries account for around 50% of the total Indian migrants in the world, as per RBI data. UAE singlehandedly contributed half of the $38.7 billion inward remittances from the Gulf countries in FY24, while maintaining its 2nd largest source of inward remittances for India, world over. The widely held Indian bank has a scheduled board meeting on the 18th of October to approve its quarterly and half yearly results ending September 2025. Some believe a formal announcement can be expected then or even earlier.
Kohlapur-based RBL is 100% publicly owned with several domestic institutions and mutual funds owning small stakes.
ET in its July 2nd edition was the first to report Emirates NBD was eyeing a significant minority stake in the bank. At that time, RBL denied the news to other media agencies calling it incorrect and speculative. It however, informed the stock exchanges that “The Bank routinely evaluates various opportunities in the ordinary course, for growth and expansion of its business.”
Live Events
Mails sent to Sharad Agarwal, CEO Emirates NBD in India and RBL Bank spokesperson.
EY and JP Morgan are advisors in the transaction
RBL Bank’s shares have jumped 6.58% in the last one month. Year to date it has galloped 83.27% in anticipation of a transaction, making it the best performer among listed bank stocks. It closed flat at Rs 289.20 on the NSE on Monday. Keeping in mind the surging share price, the transaction is expected at current price levels, a shade short of its 52-week high of Rs 296.40/share, reached on Monday.
“The deal structure will be similar to the recent IHC-Sammaan Capital in terms of preferential allotment and warrants to be followed by open offer,” said an official in the know. “Talks had begun when the stock was at Rs 220 levels so its unlikely that there will be a premium to current prices.”
A control transaction would make this among the top three banking sector M&As deal till date and underpins the heightened interest of foreign financial group in the fast-growing Indian banking and shadow lending space. Earlier this year, Japan’s SMBC bought a significant minority stake of 20% in Yes Bank as a first step towards taking majority ownership. SMBC had in 2021 taken a $2 billion bet to acquire a 74.9% stake in non-banking finance company (NBFC) Fullerton India Credit in 2021. ET also exclusively reported on October 1st that Mitsubishi UFG Financial Group (MUFG) is in active discussions to buy a 20% stake in in India's second NBFC, Shriram Finance, for about Rs 23,200 crore ($2.6 billion).
Current foreign direct investment (FDI) norms permit aggregate overseas participation in Indian private banks up to 74%, with the holding of each entity capped at 15%. FDI rules don’t permit a single foreign bank to take a controlling stake in an Indian lender. However, the RBI has made exceptions, including Prem Watsa’s Fairfax acquiring a 51% stake in ailing Catholic Syrian Bank in 2018 or DBS taking over Lakshmi Vilas Bank in 2020. However, there will be no relaxation in RBI’s stance on voting rights, currently capped at 26%, said the people cited.
Banking industry officials expect Emirates NBD too receiving a 15-year time line from the regulators to bring down its stake or set up a wholly owned subsidiary (WOS) and merge RBL. “The regulator is increasingly showing a pragmatic approach to these issues save voting rights cap. Like Japan, UAE too is a strategic economic partner for India. So there is a bilateral trade angle too,” said a CEO of a foreign bank in India, on condition of anonymity.
RBL Turnaround
The RBL share and performance has been a rollercoaster since the lows of Rs 72.9/share in June 2022 following a spate of regulatory interventions by the RBI. After recouping losses by January 2024, the stock went into a free fall due to poor fundamentals. Between July 2024 to January 2025, the shares slumped by over 43% as the bank reported a sharp decline in profit, deteriorating asset quality and termination of co-branded credit card issuance, a high unsecured lending portfolio made the investors pessimistic about the stock.
Since then, the management has shifted focus towards a more secure retail credit system, reflective in its financial performance as well. “The bank’s advances have surged 14% YOY driven by robust secured retail growth of 29% and strong wholesale advances,” said Kunal Shah, banking analyst with Citi.
The loan growth guidance given by the bank management to Morgan Stanley (MS) analysts last month indicated a 14-16% with retail secured loans projected to grow at 20%+ levels and corporate banking at 14-15% led by mid sized corporates. “Indeed, CASA+retail deposits are at 66% of deposits vs 47% two years ago. The asset quality slippages and credit costs should also improve over the next few quarters,” said Sumeet Kariwala, Executive Director in Financials Equity Research at MS.
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Emirates NBD Bank is in advanced talks to invest Rs 15,000 crore in RBL Bank, aiming to become its largest shareholder with a 51% stake. The deal, pending RBI approval, will expand the UAE bank's Asian footprint and tap into the India-Middle East remittance market. RBL Bank's share price has surged in anticipation of this significant foreign investment.
Emirates NBD Bank PJSC, the second-largest bank in the UAE, is in advanced negotiations with RBL Bank to finalise a Rs 15,000 crore ($1.7 billion) investment in the private lender and emerge as the single largest and controlling shareholder, said multiple people involved.
The investment is said to be in the form of preferential allotment of equity shares and warrants to be followed by an open offer for an additional 26% stake. The entire investment will be through primary infusion of capital to help recapitalise the bank. The current market capitalisation of RBL Bank is Rs 17,786.79 crore. Upon completion, Emirates NBD is expected to end up owning 51% of the expanded equity capital base. One of the sources mentioned above said the banking regulator RBI has in recent weeks given its in principle approval for the change of control.
The transaction, expected to be announced this month, will expand its footprint in Asia and help make a strong play for the high growth India-Middle East remittance market. Indian migrants in the Gulf Cooperation Council (GCC) countries account for around 50% of the total Indian migrants in the world, as per RBI data. UAE singlehandedly contributed half of the $38.7 billion inward remittances from the Gulf countries in FY24, while maintaining its 2nd largest source of inward remittances for India, world over. The widely held Indian bank has a scheduled board meeting on the 18th of October to approve its quarterly and half yearly results ending September 2025. Some believe a formal announcement can be expected then or even earlier.
Kohlapur-based RBL is 100% publicly owned with several domestic institutions and mutual funds owning small stakes.
ET in its July 2nd edition was the first to report Emirates NBD was eyeing a significant minority stake in the bank. At that time, RBL denied the news to other media agencies calling it incorrect and speculative. It however, informed the stock exchanges that “The Bank routinely evaluates various opportunities in the ordinary course, for growth and expansion of its business.”
Live Events
Mails sent to Sharad Agarwal, CEO Emirates NBD in India and RBL Bank spokesperson.
EY and JP Morgan are advisors in the transaction
RBL Bank’s shares have jumped 6.58% in the last one month. Year to date it has galloped 83.27% in anticipation of a transaction, making it the best performer among listed bank stocks. It closed flat at Rs 289.20 on the NSE on Monday. Keeping in mind the surging share price, the transaction is expected at current price levels, a shade short of its 52-week high of Rs 296.40/share, reached on Monday.
“The deal structure will be similar to the recent IHC-Sammaan Capital in terms of preferential allotment and warrants to be followed by open offer,” said an official in the know. “Talks had begun when the stock was at Rs 220 levels so its unlikely that there will be a premium to current prices.”
A control transaction would make this among the top three banking sector M&As deal till date and underpins the heightened interest of foreign financial group in the fast-growing Indian banking and shadow lending space. Earlier this year, Japan’s SMBC bought a significant minority stake of 20% in Yes Bank as a first step towards taking majority ownership. SMBC had in 2021 taken a $2 billion bet to acquire a 74.9% stake in non-banking finance company (NBFC) Fullerton India Credit in 2021. ET also exclusively reported on October 1st that Mitsubishi UFG Financial Group (MUFG) is in active discussions to buy a 20% stake in in India's second NBFC, Shriram Finance, for about Rs 23,200 crore ($2.6 billion).
Current foreign direct investment (FDI) norms permit aggregate overseas participation in Indian private banks up to 74%, with the holding of each entity capped at 15%. FDI rules don’t permit a single foreign bank to take a controlling stake in an Indian lender. However, the RBI has made exceptions, including Prem Watsa’s Fairfax acquiring a 51% stake in ailing Catholic Syrian Bank in 2018 or DBS taking over Lakshmi Vilas Bank in 2020. However, there will be no relaxation in RBI’s stance on voting rights, currently capped at 26%, said the people cited.
Banking industry officials expect Emirates NBD too receiving a 15-year time line from the regulators to bring down its stake or set up a wholly owned subsidiary (WOS) and merge RBL. “The regulator is increasingly showing a pragmatic approach to these issues save voting rights cap. Like Japan, UAE too is a strategic economic partner for India. So there is a bilateral trade angle too,” said a CEO of a foreign bank in India, on condition of anonymity.
RBL Turnaround
The RBL share and performance has been a rollercoaster since the lows of Rs 72.9/share in June 2022 following a spate of regulatory interventions by the RBI. After recouping losses by January 2024, the stock went into a free fall due to poor fundamentals. Between July 2024 to January 2025, the shares slumped by over 43% as the bank reported a sharp decline in profit, deteriorating asset quality and termination of co-branded credit card issuance, a high unsecured lending portfolio made the investors pessimistic about the stock.
Since then, the management has shifted focus towards a more secure retail credit system, reflective in its financial performance as well. “The bank’s advances have surged 14% YOY driven by robust secured retail growth of 29% and strong wholesale advances,” said Kunal Shah, banking analyst with Citi.
The loan growth guidance given by the bank management to Morgan Stanley (MS) analysts last month indicated a 14-16% with retail secured loans projected to grow at 20%+ levels and corporate banking at 14-15% led by mid sized corporates. “Indeed, CASA+retail deposits are at 66% of deposits vs 47% two years ago. The asset quality slippages and credit costs should also improve over the next few quarters,” said Sumeet Kariwala, Executive Director in Financials Equity Research at MS.
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(Catch all the Business News, Breaking News and Latest News Updates on The Economic Times.)
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(Catch all the Business News, Breaking News and Latest News Updates on The Economic Times.)
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