After RBI revoked Lakshmi Vilas Bank and put it under the PCA (Prompt Corrective Action) framework which puts restrictions on its operations, shares of Indiabulls Housing Finance have come under pressure. In Monday's session, the stock sank by 38.5 percent to hit an intraday low of Rs 240.05 on NSE.
In April, Lakshmi Vilas Bank announced its plans to merge its operations with IBHF in a share swap deal.
The stock is showing such turbulence as investors remain cautious of its likely merger with Lakshmi Vilas Bank which has been alleged to engage in malpractices. The RBI has put it in PCA owing to high NPAs, insufficient capital and a negative return on assets.
The further slump in share prices comes amid reports that the Delhi High Court has agreed to hear a plea seeking probe against IBHF for allegedly advancing dubious loans, misappropriation and diversion of funds to the promoters of the company. On Friday, HC issued notices to IBHF, SEBI, RBI and other respondents in public interest litigation (PIL) seeking a probe into the mortgage lender.