InvestorQ : What is the news about LVB selling a significant stake to a global BFSI player?
Mitali Bhutta made post

What is the news about LVB selling a significant stake to a global BFSI player?

Answer
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Dawn Cherian answered.
3 months ago


Lakshmi Vilas Bank better known as LVB, has been reportedly approached by Clix Capital with a proposal to acquire a significant stake in LVB. The South based bank has been desperately looking for capital and has been searching for a buyer for a long time to shore up its capital base. According to a filing made by the bank to the stock exchange, Clix had proposed to buy a 49% stake in LVB. There is some synergy between the two. Clix and LVB focus on lending to consumers and to small and medium sized businesses. LVB has recently faced some serious governance issues apart from typical problems like rising levels of bad loans, low capital cushion and negative ROA. This became inevitable after the proposed merger between LVB and Indiabulls Housing was struck down by the RBI. LVB has a capital adequacy ratio of just 3.46%, which is precariously low, while gross NPAs stand at 23.27%; both eminently unsustainable scenarios.