Lakshmi Vilas Bank (LVB) plans to elevate up to Rs 1,500 crore to fund business growth and increase foreign shareholding to as much as seventy-four percent, the private lender said in a notice. LVB stated it will searching for approval for the proposals from its shareholders in the upcoming annual general meeting (AGM) on September 25 which will take place through audio/visual means due to the coronavirus pandemic.
The bank has been exploring diverse options for raising funds for augmenting the tier-I capital to support business growth as directed by the RBI, it said in the notice.
The Chennai-based lender said the board of directors in its meeting on August 26 accorded its acclaim for raising of funds, along with by way of issue of equity shares, GDRs, ADRs foreign currency convertible bonds (FCCGs), preference shares convertible into equity stocks among others in one or more tranches by way of one or more public and/or private offerings. At the same time, no particular instrument has been recognized at this stage, in the event, the issue might be structured in this sort of manner that the proceeds of the same might now not exceed Rs 1,000 crore.
The bank can even seek shareholders’ acclaim for elevating another Rs 500 crore by issuing debt securities. The bank has been borrowing funds for augmenting capital funds to help business growth as directed with the aid of RBI within the limits accredited by members of the bank.
The notice stated that the board of directors has proposed to achieve the consent of the members of the bank for borrowing/raising funds in Indian /foreign currency by issue of debt securities under the relevant provisions of the applicable circulars or guidelines issued by RBI, up to Rs 500 crore in aggregate, for additional Tier I and/or Tier II capital, in one or more tranches in domestic and/or overseas market.
To fulfill its capital requirements, LVB had sought the RBI’s approval to amalgamate Indiabulls Housing Finance and Indiabulls Commercial Credit Ltd into itself in May 2019.
In the occasion, the discussion between the contracting parties about the proposed transaction is a hit and definitive agreements are executed, we can make suitable disclosures as required under the provisions of applicable law,” LVB stated in an annual report for FY2020.
The auditor’s report said that there was a constant decline in the bank’s deposit base due to the fact of September 2019 and boom in the NPA ratios. The previous limit approved by the shareholders at the 87th AGM held in September 2014 was 49 percent of the equity proportion capital of the bank within which the aggregate NRI holding cannot exceed 24 percent.
