Dhanlaxmi vaults 8.5% on strategic stake sale talk

Dhanlaxmi Bank surged by 8.5% on speculation it is considering a strategic stake sale and may be close to it. Its chief executive Amitabh Chaturvedi reiterated the need to raise capital in the next few months to grow business.

While any successful fundraising could be a stamp of faith in the management by investors, a strategic sale is unlikely as the Reserve Bank of India takes a final call on such things. As of now, the bank may be facing a fall in profits, but not in any kind of distress for it to be sold to a strategic investor.

An analyst says it could be that already some investors are betting that the turnaround story may be on track and that fears based on the union-triggered worries may be exaggerated. Many private sector banks such as ING Vysya, Karur Vysya and Karnataka Bank have been raising funds this year after the last few years of loans growth depleted capital.


Contributed by Deeptha Rajkumar