Lakshmi Vilas Bank shares gain nearly 5% on foreign shareholding limit

Shares of LVB gained nearly 5% in early trade after the lender said it plans to raise up to Rs 1,500 crore to fund business growth and increase foreign shareholding to up to 74%

Shares of Lakshmi Vilas Bank (LVB) on Monday gained nearly 5 per cent in early trade after the lender said it plans to raise up to Rs 1,500 crore to fund business growth and increase foreign shareholding to up to 74 per cent.

The stock jumped 4.61 per cent to Rs 20.40 on the BSE.

At the NSE, it rose by 3.33 per cent to Rs 20.15.

LVB said it will seek approval for the said proposals from its shareholders in the upcoming annual general meeting (AGM) on September 25, that will take place through audio/visual means due to the coronavirus pandemic.

The bank has been exploring various options for raising funds for augmenting the tier-I capital to support business growth as directed by the RBI, it said in the notice.

"Whilst no specific instrument has been identified at this stage, in the event, the issue will be structured in such a manner that the proceeds of the same would not exceed Rs 1,000 crore," it said.

The bank will also seek shareholders' approval for raising another Rs 500 crore by issuing debt securities.

The lender will also seek shareholders' nod for raising the foreign shareholding to 74 per cent which has been already approved by the board.

The existing aggregate holding of non-resident investors in the bank's equity share capital as of March 31, 2020, is approximately 12.35 per cent, the bank said.