KOCHI: Dhanlaxmi Bank is one peculiar entity. It's a full-fledged bank that maintains the accounts of Sabarimala and numerous other temple trusts in the country. Yet, its market capitalisation is only Rs 500 crore, and its share price -- with a face value of Rs 10 -- is just Rs 24.
The Thrissur-based private bank, which does business of around Rs 25,000 crore, has been a takeover target for many years with its suitors said to include ICICI Bank, YES Bank and RBL Bank, though they deny any interest.
The recent improvement in results has also increased the bargaining power of the bank. The bank reported a net profit of Rs 6.02 crore in the September quarter, up from a mere Rs 45 lakh in the same quarter last year. Last year, Dhanlaxmi Bank had reported a net loss of Rs 209.45 crore.
“The main attraction of the bank is that it is only worth Rs 500 crore. Though there has been speculation of a possible acquisition by a larger entity, nothing concrete has happened so far. The bank is strong as it has many high quality deposits including those of temple trusts,” said Akshay Agarwal, managing director of Acumen Capital Market (I) India Limited.
Dhanlaxmi Bank was incorporated in 1927 and has 280 branches. It employs around 2,500 people. The gross NPAs stand at 6.86 per cent and net NPAs 2.52 per cent.
“The only way out for Dhanlaxmi Bank is acquisition by a major bank either in the public sector or private sector. It will take place sooner or later,” said C D Joson, Kerala state convener of the United Forum of Bank Unions.
NRI businessman Ravi Pillai of the RP Group is the largest individual shareholder in Dhanalaxmi Bank with 10 per cent followed by C K Gopinathan (6.97 per cent). Lulu Group managing director M A Yusuf Ali holds 4.22 per cent.
The bank's institutional share holders include Marshal Global Capital Fund, Antara India Evergreen Fund, Elara India Opportunities Fund, among others. Kapil Wadhwan of DHFL owns 5 per cent.
An email query sent to G Sreeram, the managing director and CEO of Dhanlaxmi Bank did not elicit any response.