Shares of Lakshmi Vilas Bank NSE 4.79 % (LVB) went up on Wednesday after the cabinet approved the lenders’ merger plan with DBS India.
In reaction, the LVB shares reversed early losses, and rose 2.05 percent at Rs 7.45, while benchmark Sensex was down 0.40 percent at 44,343.98 points. The stock is still down 40 percent over the last week, and 55 percent over the last month.
On November 17, the RBI unveiled a draft merger scheme under which DBS will infuse Rs 2,500 crore regulatory capital into the cash-strapped LVB. The regulator wants the entire process to be completed by December 16.
According to the draft merger scheme, the entire paid-up share capital of the bank will be written off upon merger. This move has shocked the bank’s equity investors and some of them have threatened to seek legal remedies.
