Lakshmi Vilas Bank - Non-binding offer from Clix group - Angel Broking

Mr. Jaikishan Parmar - Sr. Equity Research Analyst, Angel Broking Ltd

"Lakshmi Vilas Bank (LVB) has been struggling to raise funds for the last many quarters and the asset quality trend is also not improving. The asset quality deteriorated with gross non-performing assets (NPAs) rising to 25.40 percent of the gross advances as from 17.30 percent in the earlier quarter.

Recently shareholders of LVB voted against the appointment of seven directors including the chief executive and managing director. However, on Thursday Bank received an indicative non-binding offer from the Clix Group. LVB is in urgent requirement of capital as the banks Capital Adequacy ratio stands at 1.12 percent as of Q4FY21 against the RBI requirement of 8 percent. RBI might consider Clix and LVB merger the first option as this could be the fast solution as Clix has done the due diligence of the business. If this option fails then it may consider merging with a bigger bank."

Shares of LAKSHMI VILAS BANK LTD. was last trading in BSE at Rs.17.8 as compared to the previous close of Rs. 16.6. The total number of shares traded during the day was 239483 in over 927 trades.

The stock hit an intraday high of Rs. 18.2 and intraday low of 15.65. The net turnover during the day was Rs. 4070585.

Source : Equity Bulls

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