Shares of Lakshmi Vilas Bank (LVB) and Indiabulls Housing Finance came under pressure in the early trade on Monday after the Reserve Bank of India (RBI) initiated prompt corrective action (PCA) plan on the former.
At 09:49 am, the stock of LVB was locked at the lower circuit limit of 5 per cent at Rs 34.75 apiece on the BSE while that of Indiabulls Housing Finance was trading over 14 per cent lower at Rs 334.15.
Both LVB and Indiabulls Housing Finance are proposed to merge. Last month, Indiabulls Housing Finance said it expects the regulator to take a decision on its merger plan with Lakshmi Vilas Bank in the next two months.
"The company has proposed Sameer Gehlaut as the non-executive chairman and Gagan Banga as the MD and CEO of the amalgamated bank.The Competition Commission of India (CCI) had given its green light to the proposed merger of Indiabulls Housing Finance (IBHFL) and Indiabulls Commercial Credit (ICCL) with Lakshmi Vilas Bank (LVB) in June 2019," said a Business Standard report.
The Competition Commission of India (CCI) had given its green light to the proposed merger of Indiabulls Housing Finance (IBHFL) and Indiabulls Commercial Credit (ICCL) with Lakshmi Vilas Bank (LVB) in June 2019.
In a press release dated September 28, Lakshmi Vilas Bank reassured customers that PCA plan does not mean moratorium on the bank and that bank can transact normal business. "There are no restrictions on operations by depositors. Bank can also undertake lending activities to all segments except corporates and other stressed and high risk sectors," it addded.
The bank further said that the corrective action plan covers various suggestions/measures to recover NPAs, reduce costs, boost capital, downsize RWAs (Risk-weighted assets) and improve profitability and the management was in the process of implementing all these measures. CLICK TO READ FILING
Other Indiabulls group stocks were, too, trading in the negative zone. Indiabulls Real Estate was down 10 per cent at Rs 45.90 apiece on the BSE while Indiabulls Ventures hit lower circuit Rs 123.75, down 20 per cent. On Saturday, Indiabulls Real Estate said shareholders have approved a proposal to sell its London property to promoters for £200 million in an annual general meeting held on September 28.
The resolution to sell the London property has been approved by the requisite majority of shareholders, according to an exchange filing. Earlier, the company had disclosed its plans to focus on its India business and cut down on debt, news agency PTI reported.