India’s RBL Bank expects its landmark $3 billion deal with Emirates NBD to conclude within the next five to eight months. The transaction marks the largest banking acquisition in India by a foreign financial institution, and the biggest foreign direct investment (FDI) inflow into the country’s banking sector.

“It should be somewhere in the 5–8-month range,” R Subramaniakumar, Managing Director and CEO of RBL Bank, told the media.

On Saturday, Emirates NBD, the UAE’s second-largest bank, announced a long-term commitment to the Indian market with plans to acquire a majority stake in RBL Bank for $3 billion. The Dubai bank will take a controlling stake via a preferential issue of up to 60%. As part of this transaction, ENBD will also make a mandatory open offer for the purchase of up to 26% stake from the public shareholders of RBL Bank. Both transactions will be in accordance with regulatory approvals.  RBL is proposing to simultaneously seek federal and regulatory approvals while it seeks shareholder nod for the majority takeover.

Emirates NBD’s open offer is expected to precede the preferential allotment.

"The primary issuance is expected to be up to 60%. Depending on the response to the open offer, we must maintain the minimum 25% public shareholding as per Sebi guidelines. If the combined open offer and preferential stake exceed that limit, there will be a proportionate scale-down. However, we don't expect the open offer to materially reduce the primary issuance," The Economic Times quoted Jaideep Iyer, head of strategy, RBL Bank, as saying.

Ernst & Young LLP (EY) – Investment Banking, JP Morgan, and NeoStrat Advisors advised Emirates NBD on the deal.

Shardul Amarchand Mangaldas & Co. was the legal advisor for ENBD and AZB & Partners for RBL Bank.

“An enhanced presence in India for ENBD, through a well-established business like RBL Bank, would further complement ENBD’s service to customers operating throughout the MENATSA region. We envisage to support Indian businesses, trade, projects, and other opportunities throughout the region leveraging our network,” Shayne Nelson, Group CEO of Emirates NBD said.

Maharashtra-based RBL is 100% publicly owned with many Indian institutions and mutual funds owning small stakes.

If the deal concludes after securing the necessary approvals, it will stand out for its first-of-its-kind structure in India’s banking landscape, as well as for integrating multiple regulatory frameworks and cross-border dynamics.

India has been witnessing a string of high-profile M&A deals in its financial sector.

In early October, Abu Dhabi’s global investment company, IHC, announced a $1 billion investment in Sammaan Capital Limited, a listed NBFC focused on mortgage lending. The company operates through 220 branches across more than 150 towns and cities, employing over 4,430 people and playing a vital role in India’s financial inclusion and growth.

Also in May, Japan’s Sumitomo Mitsui Banking Corporation (SMBC) agreed to acquire a 20% stake in Yes Bank for $1.6 billion.

(Writing by Seban Scaria; editing by Daniel Luiz)
(seban.scaria@lseg.com)