Lakshmi Vilas Bank shares surged by their daily maximum limit of 5 per cent on Monday, marking a third straight day of gains. On the BSE, shares in private-sector lender Lakshmi Vilas Bank rose to as much as Rs 97.35, from the previous close of Rs 92.75, after board of directors of the bank approved the merger deal with housing finance company Indiabulls Housing Finance. Meanwhile, the Reserve Bank of India (RBI) said it had not yet approved the proposed merger between Lakshmi Vilas Bank and Indiabulls Housing Finance.
As per the merger deal, for every one share of face value of Rs 10 of Lakshmi Vilas Bank, its shareholders will get 0.14 equity share of Indiabulls Housing Finance of face value of Rs 2 each.
The bank believes that the merger of such two organisations will unlock value through its various synergies that exist exclusively but in unison, will create a large and healthy diverse retail asset book, high capital base for strong growth, huge opportunity to foray into newer businesses that may increase the risk fee income base of amalgamated entity such as wealth management, asset management and securities, tap into varied but experienced management and skilled personnel to develop a successful capital accretive model, the Chennai-based Lakshmi Vilas Bank said on the rationale of the merger with Indiabulls Housing Finance.
Indiabulls Housing Finance board has constituted a reorganisation committee headed by SS Mundra, independent director on the board of Indiabulls Housing Finance and ex-deputy Governor RBI to undertake necessary decisions in relation to the proposed amalgamation between Indiabulls Housing Finance and Lakshmi Vilas Bank, the company said.
At 12:01 pm, Lakshmi Vilas Bank shares were locked in 5 per cent upper circuit at Rs 97.35 and Indiabulls Housing Finance traded 0.09 per cent lower at Rs 902.30.
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