Will Laxmi Vilas Bank Stock Fall to Rs 0?

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Will Laxmi Vilas Bank Stock Fall to Rs 0?
Credit: © Reuters.

By Aditya Raghunath

Investing.com -- Yesterday the RBI announced it has put Lakshmi Vilas Bank Ltd (NS: LVLS ) under a moratorium until December 16, 2020. This means the bank’s depositors will not be allowed to withdraw over Rs 25,000 until the next month. RBI also said LVB will be merged with DBS Bank Ltd (SI: DBSM_pc ) and the latter will infuse Rs 2,500 crore as part of the merger.

Under the rules of the proposed merger, the paid-up share capital, as well as reserves and surplus of LVB, will be written-off. This means the stock will get delisted from the stock exchange and will be valued at zero. LVB Bank lost over 20% today to hit a lower circuit of Rs 12.45 on the BSE.

It owes the subsidiary of financial services company Religare Enterprises Ltd (NS: RELG ), 950 crores in unpaid dues. Lakshmi Vilas Bank has reported losses for three consecutive years. In the September quarter, its net loss was Rs 397 crore while the gross NPA ratio was a staggering 24.5%. According to Brickworks rating, Lakshmi Vilas Bank’s weak balance sheet and high levels of gross NPAs, as well as consistent losses, led to the stock’s downgrade last month.

The largest shareholders of LVB include Indiabulls (NS: INBF ) Housing Finance (4.99%), SREI Infrastructure Finance Ltd (NS: SREI ) (3.34%), and Capricorn Investment Group Ltd NM (NM: CGP ) (3.82%).

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  • Subin CB @Subin CB
    They changed it now..
    Like 1
  • Dheeraj Gujaran @Dheeraj Gujaran
    how is anyone allowed to post an article with incorrect info. it's DBS and not dcb
    Like 3
  • ManMohan Reddy REDDY @ManMohan Reddy REDDY
    buy between 1-2
    Like 0
  • Deepak Gupta @Deepak Gupta
    DBS
    Like 0
  • Subin CB @Subin CB
    DCB or DBS.. pls check properly
    Like 2
    • Vikas Bakshi @Vikas Bakshi
      it's DBS - Development bank of Singapore.
      Like 0
    • Vikas Bakshi @Vikas Bakshi
      its DBS - Development bank of Singapore.
      Like 0
    • Subin CB @Subin CB
      They mentioned as DCB
      Like 0
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