Lakshmi Vilas Bank to raise Rs 98.36cr via rights

Tamil Nadu-based Lakshmi Vilas Bank (LVB) plans to raise Rs 98.36 crore through a rights issue of equity shares to take its networth beyond the minimum Rs 300 crore prescribed by the Reserve Bank of India (RBI).

The private sector bank will issue 1.96 crore equity shares of Rs 10 each to existing shareholders at a premium of Rs 40 per share. The ratio of rights shares in 1:1.

LVB's networth after the rights issue will increase to Rs 389.41 crore from Rs 291.04 crore now and Rs 229.99 crore at the end of March 2006.

The bank is also issuing bonus shares in the ratio of one bonus share for
the two existing shares. However, the bonus shares are not entitled for the
rights share.

The bank's capital adequacy ratio as on March 31, 2006 was 10.79%,
as against the RBI stipulation of 9%. The shares of LVB today closed
8.88% up at Rs 121.35 per share on the National Stock Exchange. The
book value of LVB shares is Rs 149 per share.