Lakshmi Vilas Bank is in negotiating with the investors to raise Rs. 1000 crore. Earlier this month the bank had entered in deal with Clix Capital Services Ltd. , Aion backed NBFC(Non-Bank Financial Company).
Chief of Lakshmi Vilas Bank has said that they need more capital infusion to make profit and grow. They are trying to boost their capital adequacy ratio by raising capitals.
We have got Clix as they have expressed their interest to merge with the bank. The advantage is that they are capital surplus and we are capital deficit.We need capital, they have surplus capital. So I find it is a very good alignment in the sense that they have about ₹1,900 crore of capital (surplus).
S. Sundar said this after signing merger deal with Clix, which would infuse Rs.1,900 crore.
I find this is a very good alignment in the sense that they have about ₹1,900 crore of capital and their assets are about ₹4,500 crore- ₹4,600 crore or so. They may need capital allocation of 10 per cent on it, (which means) about ₹500 crore. So, there is a surplus capital of ₹1,400 crore. Thus, on merger, it should come to the bank. After allocating ₹500 crore capital for Clix’s assets, the bank will be left with a surplus shareholders’ fund of about ₹1,400 crore from Clix, for use on the bank’s assets. This fund is sufficient for the bank. On the top of this, the bank’s advisers have also received interest from other investors to the tune of ₹1,000 crore,
S.Sundar told the sources.
