Private-sector lender Lakshmi Vilas Bank (LVB) on Monday said its board would meet on April 22 to discuss the price and date of preferential equity shares to be issued to Indiabulls Housing Finance (IBHF) following their merger earlier this month.
The bank has proposed to make preferential allotments to the extent of 4.99% of its post-money equity – a company’s estimated worth after external capital injections are made to its balance-sheet. “This does not presuppose any capital augmentation on account of the proposed merger, which would only conclude after receipt of all regulatory approvals,” the bank clarified in a statement.
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Indiabulls Housing Finance on April 5 said it would merge with Lakshmi Vilas Bank in an all-share deal, where 100 shares of the bank would fetch 14 shares of the housing-finance lender. The merged entity, to be called Indiabulls Lakshmi Vilas Bank, will be among the top eight private sector banks in India by size and profitability, Indiabulls Housing Finance said in an exchange filing. However, the merger is yet to receive regulatory approvals from RBI.
In March, the south-based lender raised `459.59 crore through a qualified institutional placement (QIP) to bolster its capital adequacy. The bank’s capital adequacy ratio (CAR) was at 7.57% as of December 2018, lower than the minimum regulatory threshold of 8% under Basel-III norms.
Lakshmi Vilas Bank has over `30,000 crore in deposits – of which `7,000 crore is CASA – and 22 lakh depositors across 569 branches.