A sharp surge in net profits

The compounded annual growth rate in net profits of RBL Bank has been close to 145 per cent in the last 4 years.

This is whopping growth by any standards and shows the bank is on the fast track to growth.

Sizeable foreign holding

As on March 31, 2015 more than 41 per cent of the bank comprised foreign holding.The big foreign institutions seem to be extremely bullish on the bank.

Reasonably priced

RBL's diluted EPS for 2016, makes the p/e at 23.9 times, which is reasonable when compared to peers like IndusInd and Yes Bank, though these are larger players.

It seems neither cheap nor expensive at the current levels.

Low level of non performing assets

At a time when the banking sector is reeling under asset quality worries, there is little to worry for RBL Bank. Net non performing assets for 204-15 were placed at 0.57 times, which is extremely low. 

It seems to be the best among top private sector banks.

Good Capital Adequacy

RBL Bank has a good capital adequacy of near 13 per cent. This will give the bank the opportunity to grow at a rapid pace.

Cashing in on huge opportunities

The company has done well and has a lot of lending in the micro finance space. It has taken risk, but, calculated ones. There is a huge possibility of the bank growing its books.

More of a long term bet

Since the shares are fairly valued at a p/e of around 24 times, we do not see substantial gains on listing. Those with a long term perspective can apply for the shares.