CARE Ratings downgrades LVB debt instruments over plunge in net worth

Development follows Brickwork Ratings downgrade of long-term bonds of about Rs 50 cr and LVB receiving an indicative non-binding offer from Clix Group

CARE Ratings has downgraded Lakshmi Vilas Bank (LVB)'s tier-II bonds totalling Rs 618.70 crore, citing a sharp decline in net worth caused by losses in FY20 and in Q1 of FY21.

The development comes two days after Brickwork Ratings downgraded the lender's debt to 'BWR B+'/ Credit Watch with negative implications for the lender's long-term bonds of Rs 50.50 crore, and a day after LVB received an indicative non-binding offer from the Clix Group.

LVB has reported a capital adequacy ratio (CAR) and Tier-I CAR of 0.17 per cent and -1.83 per cent (negative), respectively, as on June 30, 2020