Lakshmi Vilas Bank to float housing fin firm

Private sector lender Lakshmi Vilas Bank has decided to float a subsidiary company for undertaking housing finance business.

The bank will seek shareholders’ approval for issue of equity shares up to 40 per cent of the present issued capital. The bank is looking at a qualified institutional placement, a global depository receipts or an American depository receipt issue, or a follow-on public offer.

Lakshmi Vilas Bank Managing Director & CEO K S R Anjaneyulu said, “The housing finance space offers immense scope. We need focused and concerted efforts in this business so as to reap the benefits from this huge potential market. That is why the bank’s board has decided to float a new subsidiary to undertake the housing finance business.”

In addition, the bank plans to issue equity stock options of up to 5 million to the eligible employees and directors under the stock option scheme.

The bank had capital adequacy ratio of 14.82 per cent as per Basle-II norms as of March 31.

Anjaneyulu said the bank would require more capital to meet the expansion needs. “That is why after raising funds through a rights issue in December 2009, the bank plans to raise further share capital in the current financial year,” he added.

As on March 31, bank’s share capital was Rs 97.51 crore. Its total deposits grew by 23.28 per cent during 2009-10 from Rs 7,631 crore to Rs 9,075 crore, while its net advances stood at Rs 6,277 crore, registering a growth of 19.88 per cent from the previous year advances of Rs 5,236 crore.