Lakshmi Vilas Bank raises Rs 168 crore via QIP

Chennai-based private sector lender Lakshmi Vilas Bank (BSE Code: 534690) has raised Rs 168 crore via qualified institutional placement (QIP) with the objective of raising its capital base and to support its growth plans. The QIP was closed on December 31, 2016 at an issue price of Rs 140 per share, with a premium of Rs 130 on Rs 10 face value. The completion of the issue was, however, still done at a discount of Rs 1.15 below the established floor price of Rs 141.15.

This will likely improve the bank’s capital adequacy ratio which stood at 10.29 (Basel II) and 10.10 (Basel III) as on September-end. The additional capital will also aid the bank's expansion plans. The management has aggressive expansion plans on the books with a vision to scale up its operations nine-fold over the next ten-odd years. In addition to a strategic shift towards high yield retail and SME loans, the bank is also planning to increase its branch network to 750 in 2020 from the existing 460 at the end of March, 2016.

The bank currently has approval from its board to raise up to Rs 600 crore, so additional fund raising may also be in the offing over the coming year.

The stock, which closed at Rs 141.80 on the BSE after Friday’s trading session, opened for trading today at Rs 142. The stock is currently trading at Rs 142.50 having achieved a day’s high of Rs 143 and low of 142. The stock might remain in focus as the news of the fund raising gets absorbed by the market.