Shares of Lakshmi Vilas Bank were locked in the upper circuit of 10 per cent at Rs 63.50, in the morning deals on Friday after Competition Commission of India (CCI) approved the proposed merger with Indiabulls Housing Finance Ltd (IBHFL). Till 11:19 am; a combined 4.39 million shares changed hands and there were pending buy orders for 4,40,474 shares on the NSE and BSE.
The shares of IBHFL have moved higher by 4 per cent to Rs 622, bouncing back 11 per cent from its intra-day low of Rs 560 on the BSE.
In comparison, the S&P BSE Sensex was down 0.61 per cent at 39,361 points. "The Competition Commission of India (“CCI”) has by way of its letter dated June 20, 2019 intimated that CCI, at its meeting held on June 20, 2019, considered the proposed combination and approved the same," the housing finance company said in a regulatory filing. The scheme of amalgamation remains subject to receipt of applicable regulatory and other approvals. In April this year, Lakshmi Vilas Bank had announced its merger with Indiabulls Housing Finance in a share-swap deal with an intent to create a combined entity with larger capital base and wider geographical reach. As per the share swap ratio for the merger, for every 100 shares of Lakshmi Vilas Bank shareholders will get 14 shares of Indiabulls Housing Finance. In an interview with Business Standard, Parthasarathi Mukherjee, Lakshmi Vilas Bank's director and chief executive officer, said the merger of Lakshmi Vilas Bank with Indiabulls Housing Finance will see the coming together of entities whose origins could not have been more different. READ INTERVIEW HERE
"The Chennai-headquartered bank was set up in 1926 in the Karur district of Tamil Nadu to cater to the interests of the local community while Indiabulls Housing, set up in 2005, was imagined to suit the needs of the largely urban population. It will be some time before the Reserve Bank of India gives its blessings to the transaction (if at all)," the report added.