Dhanlaxmi Bank to raise another Rs 700 cr in next 6 months

MUMBAI: Having raised Rs 290 crore of Tier-I capital through a preferential allotment, south-based Dhanlaxmi Bank is planning to raise another Rs 700 crore in the next six months, a top bank official said.

"We have an enabling resolution from our Board for raising Rs 1,000 crore. We will raise the remaining Rs 700 crore in 5-6 months," the bank's Managing Director and Chief Executive, Amitabh Chaturvedi, told PTI here.

He, however, did not specify the route the bank will be adopting for raising the fresh capital.

The capital raised will be deployed for lending activities; Chaturvedi said the bank needs to keep on augmenting its capital base on a regular basis because of its high credit growth.

"We achieved a credit growth of over 75 per cent last fiscal (FY 11) and this year also, we expect it to be the same...we will require more capital," he said.

The bank's total capital adequacy stands at 11.3 per cent, which will go up to 15 per cent once the newly raised capital of Rs 290 crore starts reflecting in company books.

Earlier last week, the bank announced it will be raising Rs 290.53 crore through a preferential issue of equity shares to a group of four private equity funds.

The investment by the funds -- WCP Mauritius Holdings (Wolfensohn Capital Partners), Customers Bancorp Inc, MKCP Mauritius Master Holdings II and Multiples Private Equity -- has a lock-in period of one year. The fresh issue will result in the holding of each of the 50,000-odd existing shareholders getting diluted by 20 per cent.

The allotment has happened at an over 15 per cent premium over the scrip's trading price on the Bombay Stock Exchange.

Source: EconomicTimes