Lakshmi Vilas Bank tumbles to all-time low, erodes 48% over 5 sessions

MUMBAI: Lakshmi Vilas Bank continued to erode value, and fell another 10 per cent to hit an all-time low on Monday, reeling under pressure as investors stand to lose heavily under the Reserve Bank of India’s (RBI) amalgamation scheme of the bank with Singapore’s DBS Bank.

At 10:25 am, Lakshmi Vilas Bank’s shares were down 10 per cent at a record low of Rs 8.10, while Sensex traded flat at 48,873.86 points.

The stock has been falling for five straight sessions and has erased more than 48 per cent of its value in the period.

RBI did not issue the final merger scheme for Lakshmi Vilas Bank (LVB) with DBS India on Friday, as stated earlier, and is likely to do so only next week, PTI reported on Saturday citing a central bank official.

While placing LVB under a moratorium and then issuing a draft amalgamation scheme on November 17, the RBI had said it would issue the final merger scheme on November 20 (Friday) so as to help complete the resolution for the 94-year-old lender by December 16.

Meanwhile, the bank’s shareholders who are upset with the draft scheme, are waiting for the final amalgamation plan to be announced by the central bank before taking legal opinion.

While promoters own just 6.8 per cent of the bank -- K R Pradeep owns 4.8 per cent and the other three promoter families N Ramamritham, NT Shah and SB Prabhakaran collectively own 2 per cent -- retail shareholders hold over 45 per cent of LVB's shares.

PTI reported Pradeep would wait for the final merger scheme from the RBI before finalising the future course of action.