MUMBAI: Dhanlaxmi Bank BSE 7.65 %, the capital-starved Thrissur, Kerala based bank, may well become the target for other private lenders who are still building their low-cost deposit base and looking for sticky retail customers, said two bankers familiar with the developments.
The bank, which has been on notice from the central bank due to deteriorating capital position, has to soon raise capital, which may be difficult to come by from secondary market , forcing it to look at strategic investors, said those bankers requesting anonymity.
While established lenders such as HDFC Bank and Axis Bank may not be interested in Dhanlaxmi, others looking to build their operations such as the stock exchange bound RBL Bank or YES Bank, may decide to look at funding it, said those bankers. There is no certainty that a transaction will happen with no concrete proposals yet on the table.
Dhanlaxmi managing director G Sreeram did not reply to an email seeking comment. A YES Bank spokesperson said, “YES bank is not involved in any discussions with regards to the mentioned transaction/investment. YES Bank continues to focus on organic growth business strategies for the bank.”
Rajeev Ahuja, head of strategy at RBL, denied any interest in Dhanlaxmi Bank.
“Dhanlaxmi Bank’s capital adequacy ratio is less than 9 per cent. One of the largest shareholders of the bank is thinking through options, including putting little bit more money,” said an investment banker.
In the quarter ended March, Dhanlaxmi reported a Rs 132 crore loss as a result of which its capital adequacy dropped to 7.51 per cent, much lower than the minimum 9 per cent required by RBI norms.
Dhanlaxmi’s shareholding is a mishmash of individual as well as institutional investors. The bank does not have a promoter with whom a prospective investor can even negotiate.
Among the individual investors, two gulf-based Keralite businessmen, Ravi Pillai and MA Yusuf Ali, hold 4.99 per cent and 4.31 per cent stake in the bank, respectively. Institutional holders include Marshal Global Capital Fund, Antara India Evergreen Fund, Elara India Opportunities Fund among others, regulatory filings show. Kapilkumar Wadhwan of DHFL owns 3.5 per cent.
Source: Economic Times