Shares of Lakshmi Vilas Bank gained almost 5% in Monday's trade after the lender said it plans to raise up to Rs 1,500 crore to fund business growth and increase foreign shareholding to up to 74%. The Chennai-based lender said it would seek approval for the proposals from its shareholders in the upcoming annual general meeting (AGM) on September 25.
LVB said the board of directors in its meeting on August 26 accorded its approval for raising of funds, including by way of issue of equity shares, GDRs, ADRs foreign currency convertible bonds (FCCGs), preference shares convertible into equity shares among others in one or more tranches by way of one or more public and/or private offerings.
Lakshmi Vilas Bank stock opened 4.6% higher and touched an intraday high of Rs 20 as against the last closing of Rs 19.50, also its intraday low. Market capitalisation of the micro-cap stock stood at Rs 663.33 crore as of today's session.
LVB stock has risen 1.55% in the last 2 days. The stock has risen 14% since the beginning of the year. Lakshmi Vilas Bank share price trades higher than 100 and 200-day moving averages but lower than 5, 20 and 50-day moving averages.
"While no specific instrument has been identified at this stage, in the event, the issue will be structured in such a manner that the proceeds of the same would not exceed Rs 1,000 crore," it said.
The private lender said it would also seek shareholders' approval for raising another Rs 500 crore by issuing debt securities.
The bank has been exploring various options to raise funds to augment the tier-I capital to support business growth as directed by the RBI, it said in the notice.