Kerala-based Dhanlaxmi bank is planning to augment the paid-up capital by issuing equity shares on a rights basis.
The bank board and prominent shareholders are currently fighting it out in the court over representation on the board.
The lender said, in a regulatory filing on Monday, the board of directors are scheduled to meet on Thursday, March 17, 2022, to discuss the augmentation of the paid-up capital.
Managing director & CEO JK Shivan told FE on Monday that the shareholders had earlier approved increasing the authorised capital to Rs 4,000 million from the current Rs 2,530 million and the board has to take the final decision.
“For increasing business, growth capital is required. The bank is above the regulatory minimum in both CET1 and CAR as on December 31, 2021. It is watching the market movements closely. At a suitable time, it will consider raising capital, which may happen in FY23. Modalities of the same will be decided in due course keeping in view the requirements of growth,” he had said in February 2022.Prominent NRI B Ravi Pillai has a 10 % stake in the bank. Other shareholders include CK Gopinathan(7.5%), MA Yussuff Ali (5 %), and Kapil Wadhawan (5%).Currently, the lender has just six directors, including two RBI nominees as against the maximum strength of 11.The lender reported an 83% year-on-year (y-o-y) decline in its third-quarter net profit to Rs 20 million largely due to a drop in other income. The provision coverage ratio (including technical write-off) as of December 31, 2021, was 77.55 % and the capital adequacy ratio stood at 13.13 %.
