Lakshmi Vilas Bank has an approval in place to issue capital by offering 5 crore shares. At current market price the bank will be able to raise around Rs 1000 crore.
NS Venkatesh, ED, Lakshmi Vilas Bank clarified that the bank had taken an enabling resolution from the Board and are awaiting shareholder approval, so could not provide more detail with regards to the issuance.
Although the bank has not yet sized the issue but if one were to consider it at the current market value, the tier I ratio would be more than 11.5 percent from the current 8.75-9 percent. The total adequacy ratio would be over 13 percent in FY18.
In case the banks is able to raise capital in the current financial year, then the funds would go towards growth, he says. The projected loan growth for FY18 is around 22-23 percent.
He is very upbeat on the GST being a big positive for the economy and also banking because the legislation will bring the inorganised sector under the organised umbrella and thus more business for the banks. All this will improve the gross domestic product (GDP) of the country, says Venkatesh.
Moreover, it would be a big spin off for the bank per se because the bank has more retail and MSME customers, he added.