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Lakshmi Vilas Bank to merge with Indiabulls Housing Finance

Lakshmi Vilas Bank to merge with Indiabulls Housing Finance

Private sector lender Lakshmi Vilas Bank (LVB) Ltd on 05 April said that its board has approved a merger with mortgage financier Indiabulls Housing Finance (IHF) Ltd in an all stock deal.

The merged entity, to be called Indiabulls Lakshmi Vilas Bank, will be among the top eight private banks in India by size and profitability.

The share swap ratio of 0.14:1, or 14 shares of IBH for every 100 shares of LVB, has been agreed upon by the respective boards of directors

However, the merger of the two entities is yet to be approved by Reserve Bank of India.

Impact:

Experts feel that with the merger IHF gets access to banking platform, essentially the liability franchisee and provides longevity to its lending business on a consistent basis.

Investors are advised to stay put if they are holding either LVB or IHF.

LVB, despite being in existence for nine decades, has struggled to make a mark in the growing banking industry. It lost market share and has been constrained for capital.

If the merger takes place, then on a proforma basis, the merged entity will have a net worth Rs 19,472 crore and a loan book Rs 1,23,393 crore as of December 2018.

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