For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts

No Takers For Lakshmi Vilas Bank Shares, Stock Slumps 10%

|

For the third straight day there were only sellers in the stock of Lakshmi Vilas Bank, with the shares plunging another 10 per cent. In three trading sessions the stock has seen an erosion of 50 per cent in value.

The shares to be sold were to the tune of 2,76,03,745 shares on the National Stock Exchange with no buyers in the counter. It's unlikely that the stock would find takers as the draft scheme of amalgamation clearly states that there would be no obligation on DBS Bank to buy the shares. The shares would hence be cancelled and delisted.

If the draft proposal for amalgamation goes through without changes, it's unlikely that shareholders of Lakshmi Vilas Bank would get even a penny. So, shareholders are trying to sell at even the lower circuit filter limits, though there are no buyers.

No Takers For Lakshmi Vilas Bank Shares, Stock Slumps 10%
 

It's highly likely that the stock would continue to hit the circuit filter limits even into the next week. According to the draft scheme of amalgamation of the bank with DBS Bank India, 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.

Lakshmi Vilas Bank shareholders are likely to challenge the move, and that is the only hope. In the case of Yes Bank, it was capital infusion by State Bank of India, while here it is an amalgamation. Earlier last year a merger by IndiaBulls Housing Finance was rejected by the Reserve Bank of India.

If the RBI does note consider the plea of shareholders and stays focussed on the interest only of depositors, it is likely to cause a great deal of losses for the shareholders. In fact, there are many big shareholders in the bank including the likes of IndiaBulls Housing Finance, which could see the value of their entire investment in the bank being wiped out.

Read more about: lakshmi vilas bank
Company Search
Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X