Dhanlaxmi Bank raises $10.8M through QIP

Kerala-based Dhanlaxmi Bank has raised Rs 67.2 crore ($10.8 million) by allotting 17.5 million equity shares at Rs 38.25 per share to qualified institutional buyers (QIB), it disclosed to the stock markets. With this the firm has raised around Rs 168 crore this year through two rounds of QIP and a preferential allotment.

Early this year, Dhanlaxmi Bank said it plans to raise growth capital of up to Rs 200 crore to augment capital base. The capital requirement of Indian banks has accelerated as Basel III kicked in on April 1 this year.

Two years ago, the bank failed to see through a proposed Rs 290 crore funding from Mount Kellet Capital, Wolfensohn Capital, Multiples PE and Jay Sidhu’s Customers Bancorp. Customers Bancorp later sealed a deal with Religare to buy a small stake in the firm as it applied for a new banking license.

Recently NRI businessman Yusuffali Musaliam Veettil Abdul Kader of LuLu Group, who has been actively buying shares of small banks, picked a minority stake in Dhanlaxmi Bank.

In 2011, the bank’s shares came under heavy drubbing after an industry union alleged irregularities in its accounts, a charge denied by the bank. The bank’s provisioning, capital adequacy ratio (CAR) and asset-liability mismatch also took a hit. Later the bank saw exit of its top management including CEO.

In the quarter ended September 30, 2013, Dhanlaxmi Bank posted a net loss of Rs 1.85 crore, as against loss of Rs 18.62 crore it had posted in the corresponding period year ago. Total income of the company in the quarter, however, grew 4.5 per cent to Rs 351.52 crore over the same quarter in the previous fiscal.

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