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Dhanlaxmi Bank raising $34M through preferential allotment

Kerala-based private sector lender Dhanlaxmi Bank Ltd is raising around Rs 200 crore ($33.9 million) through a preferential allotment to a group of investors, as per a stock market disclosure.

The board of directors of the bank at its meeting held on June 7, 2014, approved the issue 43.9 million shares to a group of 25 investors at Rs 45.55 per equity share aggregating to around Rs 200 crore, subject to the approval of RBI and the shareholders of the bank.

Those picking fresh shares include a set of individual resident and NRI investors besides Reliance Life Insurance Company Ltd, Premier Capital and Securities Ltd, Acumen Capital Market India Ltd, Pivotal Business Managers LLP, Sunidhi Wealth Advisors, Vespera Fund Ltd and existing investor B Ravindran Pillai.

The allotment of the shares is proposed to be completed within a period of 15 days from July 3, 2014.

As of May 30, 2014, resident investors hold 43.51 per cent stake in the bank; foreign institutional investors 29.11 per cent, non-resident Indian investors 13.33 per cent, corporate bodies 10.97 per cent and rest 3.08 per cent is held by clearing members, HUF, Indian financial institutions, insurance companies and others.

Post this issue, resident investors' holding will come down to 13.75 per cent. There will be no change in the control of bank.

This would be the bank's fourth round of funding. In March this year, it raised  around Rs 233 crore ($37.5 million) through a preferential allotment to a group of investors, including Kapil Wadhawan, chairman and managing director of Dewan Housing Finance Corp Ltd (DHFL).

Post which, resident investors held 47 per cent stake in the bank; foreign institutional investors 22.79 per cent and non-resident Indian investors 20.77 per cent of the expanded equity base.

Early last year, Dhanlaxmi Bank raised Rs 51 crore from a group of private investors, including BK Ravindran Pillai. In December, it went to raise Rs 67.2 crore through a qualified institutional placement (QIP).

For the year ended March 31, 2014, the bank posted a loss of Rs 25.4 crore against a net profit of Rs 2.62 crore in the year-ago period.

Shares of Dhanlaxmi Bank last traded at Rs 56.95 per share, down 5.48 per cent on BSE in a strong Mumbai market on Monday.

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