Lakshmi Vilas plans to raise Rs 350 crore from 40% stake sale

CHENNAI: Lakshmi Vilas Bank (LVB) will dilute a 40% equity to raise funds from a share sale to boost its capital and raise lending. The bank will raise funds from selling shares once market conditions improve, said LVB managing director and CEO, PR Somasundaram.

“This will mean a dilution of around 40% stake,” said Mr Somasundaram. The bank has a market value of about Rs 950 crore, which indicates that at current prices it may aim to raise about Rs 350 crore.

The bank is not in a hurry to grow its books, given the rising interest rates that are putting pressure on bank margins.

“We can’t think of aggressive growth in a high interest regime and when liquidity is a constraint,” said Mr Somasundaram. “For the moment our focus would be on liquidity management and sound credit growth.”

The bank is contemplating mortgage lending, but is yet to finalise. “Mortgage lending is on the cards and it is a big business for us. We are still debating whether to do it within the bank or through a subsidiary.”