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What next Lakshmi Vilas Bank?

... A fire sale of equity or merger with a strong bank? Time is running out. There aren't too many choices

Indiabulls had its compulsions: It desperately wanted a banking licence but why would any bank in their right mind want to acquire LVB?
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Indiabulls had its compulsions: It desperately wanted a banking licence but why would any bank in their right mind want to acquire LVB?

Tamal Bandyopadhyay
After the Reserve Bank of India (RBI) rejected Indiabulls Housing Finance Ltd’s plan to be merged with Lakshmi Vilas Bank Ltd (LVB), the housing finance company hopes to focus on the retail segment only. A recent investor presentation on its new business model has a sub-title: “The Phoenix Rises Again”.

What’s happening at LVB? Its share is now trading at a level last seen in 2003. The triggers for the continuous erosion in shareholder value in this once-upon-a-time boutique community-based bank include the inability to raise capital to set aside money for bad loans, leading to ballooning losses. The RBI bringing
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper

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