RBL Bank, which is looking to raise funds through a share sale, has found interest from private equity firm ChrysCapital, people familiar with the matter told CNBC-TV18. The PE firm is exploring options to invest around Rs 500 crore in RBL Bank if talks fructify, they said, requesting anonymity.

RBL Bank had earlier announced plans to sell shares to raise Rs 3,500 crore to shore up capital.

The bank is likely to raise close to Rs 1,500 crore from a group of investors in the first round and the remaining of the total Rs 3,500 crore is likely to be raised over the next few months.

“If a marquee investor buys RBL Bank, it will act add confidence to the bank and more investors are likely to buy the stock,” an expert said.

RBL Bank did not comment on CNBC-TV18’s query on the share sale talks.

ChrysCapital’s spokesperson told CNBC-TV18 in an emailed statement that the firm will not comment on the news.

ChrysCapital had invested in RBL Bank in pre-IPO round in 2016 and exited later.

Asset quality concerns loom large RBL Bank and it needs to shore up capital to create a buffer. In Q2FY20, RBL Bank’s net profit slumped 73 percent due to a sharp rise in provisions, which was reserved to cover for a rise in non-performing assets (NPAs).

The bank had communicated that they are taking a conservative approach in a “challenging economic scenario.”

Like Yes Bank, even RBL Bank was caught off guard due to the asset concerns on account of recent, unanticipated developments in some of the companies such as South-based coffee chain, Café Coffee Day.

RBL added Rs 1,377 crore of NPAs during the quarter, much higher than Rs 225 crore added at the end of June 2019. This has further weakened its NPA ratio to the loan book, making it critical for the bank to raise capital.

First Published:Nov 13, 2019 2:05 PM IST