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Lakshmi Vilas Bank Shares Fall Another 20%, Drops 40% In 2-Days

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Shares In Lakshmi Vilas Bank fell another 20 per cent in trade today, with only sellers in the counter. The stock has now dropped 40 per cent in two-trading days, with investors worried that if the draft proposals for an amalgamation with DBS go through, equity shareholders are unlikely to get anything.

The draft amalgamation reads: "On and from the appointed date, the transferor bank shall cease to exist by operation of the scheme, and its shares or debentures listed in any stock exchange shall stand delisted without any further action from the transferor bank, transferee bank or order from any authority."

Lakshmi Vilas Bank Shares Fall Another 20%, Drops 40% In 2-Days
 

While there maybe need for some clarification, what the initial statement means is that existing equity shareholders may not get anything. In the case of Yes Bank shareholders were safe, as there was capital infusion, which salvaged the situation and the shares continued to be listed on the exchanges. In the case of Lakshmi Vilas Bank, if the draft amalgamation go through the shares would be delisted and there would be no obligation on DBS Bank to buy the shares ahead of delisting.

It is likely that the shares would continued to hit the lower end of the circuit filter in the coming days.

Read more about: lakshmi vilas bank shares
Story first published: Thursday, November 19, 2020, 9:43 [IST]
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