Dhanlaxmi Bank to sell more shares to NRIs

Plans to raise Rs 200 cr via QIP, rights issue

Dhanlaxmi Bank is exploring options to sell more shares to non-resident Indian (NRI) businessmen. The Thrissur (Kerala) -based private lender is in talks with some of these individual investors and aims to raise about Rs 60 crore in the next couple of months through preferential share allotment.

In addition, the bank plans to raise Rs 200 crore through qualified institutional placement (QIP) or rights issue by the end of this financial year (FY14).

The moves are aimed at strengthening the bank’s capital base and finance expansion of its businesses in the northern and western parts of the country.

“In the next couple of months, we plan to raise Rs 62.25 crore through preferential share allotment. We are talking to NRI businessmen. Some of them are our customers willing to invest in the bank. A few domestic investors have also shown interest in buying minority stake,” P G Jayakumar, managing director and chief executive officer of Dhanlaxmi Bank, told Business Standard.

The old-generation private lender had recently raised Rs 37.75 crore by selling 7.55 million shares to NRI businessmen. Bahrain-based industrialist Ravi Pillai and United Arab Emirates-based businessman N V George have acquired the shares.

“We will also raise another Rs 200 crore by the end of this financial year. We are yet to finalise the mode or the pricing. It could be QIP, rights issue or a follow-on public offer. We expect our capital adequacy ratio to improve to 12.5-13.0 per cent following the fund raising exercise,” Jayakumar said.

The bank closed FY13 with a capital adequacy ratio of 11.06 per cent. Its tier-I capital adequacy ratio was 8.05 per cent at the end of March 2013.

Resident individuals have 43.5 per cent stake in the bank, while NRIs hold 8.9 per cent. The remaining shares are with banks, financial institutions, corporate bodies, and foreign institutional investors. P Raja Mohan Rao is the single-largest individual shareholder with 5.85 per cent stake in the bank.

Earlier this calendar year, UAE-based NRI businessman Yusuffali M A acquired close to five per cent stake in Catholic Syrian Bank, another old-generation private bank in Kerala.

Yusuffali, managing director of Emke Group that operates Lulu hypermarkets and supermarkets in West Asia, acquired the stake from the bank’s single-largest shareholder Sura Chanrichawla, a Bangkok-based businessman.