Private sector Lakshmi Vilas Bank today said it plans to float a housing finance subsidiary and also to raise around Rs 400 crore to fuel expansion.
The bank plans to raise the funds either through a qualified institutional placement or an ADR/GDR, either at one-go or in tranches.
"We plan to enter the housing finance business and also raise around Rs 400 crore for which we have obtained enabling resolutions from our board," its Chief Executive and Managing Director K S R Anjaneyulu told PTI here today.
"Looking at the significant expansion in branch network as well as strong growth in business, the bank will require more capital to grow. That is why after having raised funds through a rights issue in December 2009, we plan to raise further capital in the current fiscal," Anjaneyulu said.
The lender has already applied for 35 branch licences for which it is awaiting RBI approval, he said. At present, the old generation bank has 274 branches and over 178 ATMs.
While the bank would be needing resources to grow, it is not in a hurry to raise funds, Anjaneyulu he said. "We are adequately funded now and our capital adequacy ratio stands at 14.82 per cent (as of March 31, 2010). We will raise funds when the market conditions are ripe," he said.
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On its proposed home loan venture, Anjaneyulu said the business offered an immense scope. "The housing finance space offers immense scope. We need focused and concerted efforts in this business and hence, we decided to float a new subsidiary for this business."
The South-based private lender is currently in the process of finalising its capital structure and business strategy. "Our plans will be ready in about two-three months," he said.