Lakshmi Vilas Bank share price rallies 10% on completion of due diligence for Clix group merger

Lakshmi Vilas Bank share price was locked in 10 per cent higher circuit at Rs 22.35 apiece on BSE after the financial institution knowledgeable that the mutual due diligence for the merger with Clix Group was considerably full. The financial institution knowledgeable that below the non-binding letter of intent (LOI), the proposed amalgamation of Clix Group with Lakshmi Vilas Bank is topic to completion of mutual due-diligence, regulatory and different customary approvals. “The mutual due diligence is substantially complete, and the parties are in discussions on the next steps,” it mentioned. In a span of 5 and a half months, Lakshmi Vilas Bank shares have rallied 114 per cent from Rs 10.45 per share.

Earlier this month, the cash-starved financial institution introduced plans to lift as much as Rs 1,500 crore to fund enterprise progress and improve overseas shareholding to as much as 74 per cent. The financial institution mentioned that for this it should search approval from its shareholders within the upcoming annual normal assembly (AGM) scheduled on September 25. The AGM will happen by way of video conferencing/different audiovisual means (OAVM) within the wake of the coronavirus pandemic.

In June this 12 months, Lakshmi Vilas Bank signed a non-binding settlement with Clix Capital Services Private Limited (Clix Capital) and Clix Finance India Private Limited (Clix Finance), collectively often known as the Clix Group, for the proposed amalgamation of Clix Group with the financial institution for an estimated worth of Rs 1,900 crore. Since the beginning of this fiscal, Lakshmi Vilas Bank shares have zoomed 86 per cent until the earlier shut stage. During the identical interval, the S&P BSE Sensex has surged 32.5 per cent.

In May 2019, the cash-starved lender had sought the Reserve Bank of India’s (RBI) approval to amalgamate Indiabulls Housing Finance and Indiabulls Commercial Credit Ltd into itself. However, this didn’t obtain a regulatory nod for the amalgamation plan. Lakshmi Vilas Bank’s annual report highlighted that there was a gentle decline within the financial institution’s deposit base since September 2019 and improve within the NPA ratios. The financial institution’s Tier 1 capital ratio has turned damaging, at -0.88 per cent, as in comparison with the minimal requirement of 8.875 per cent.

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