Shares of Indiabulls Housing Finance and Lakshmi Vilas Bank declined after the Reserve Bank of India rejected their proposed merger.
Indiabulls Housing Finance fell 1.79% to Rs 236. Lakshmi Vilas Bank (LVB) was locked in 5% lower circuit at Rs 25.65.
Indiabulls Housing Finance informed that RBI vide their letter dated 9 October 2019 has informed that the application for voluntary amalgamation of the company with LVB can't be allowed. The announcement was made after market hours yesterday, 9 October 2019.
Indiabulls Housing Finance said as the merger will not happen with Lakshmi Vilas bank, the uncertainty of last five months on the business is lifted and the company will focus on its growth of the core business of housing finance.
In a separate announcement, Indiabulls Housing Finance informed that a meeting of the board of directors will be held on 14 October 2019, to consider the proposal of buy-back of equity shares of the company.
Meanwhile, the S&P BSE Sensex was down 140.57 points or 0.37% to 38,037.38.
On the BSE, 2.92 lakh shares were traded in the Indiabulls Housing Finance counter so far compared with average daily volumes of 31.07 lakh shares in the past two weeks. The stock hit a high of Rs 228.95 and a low of Rs 240 so far during the day.
Indiabulls Housing Finance stock had hit a 52-week high of Rs 988.3 on 10 October 2018. The stock hit a 52-week low of Rs 213 on 07 October 2019.
Indiabulls Housing Finance's primary business activities are to carry on business of investing and finance related activities and fee income, which mainly consists of financial service related fee income from services, selling of insurance products as a licensed corporate agent and other related ancillary services.
Lakshmi Vilas Bank is a scheduled commercial bank. As on 30 June 2019, Lakshmi Vilas Bank had 569 branches, 5 extension counters, 1047 ATMs in 18 states and 1 union territory. The bank offers various bouquets of products and services.
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