KOCHI:In a curious case, though its financial health is alarming, share prices of private sector lender Dhanalaxmi Bank have risen by 43.26 per cent in just 10 days. The share price, which was Rs 26.70 on March 30, has increased to Rs 38.25. Meanwhile, on April 10, the price touched a one-year high of Rs 38.25. Earlier, there were reports that a possible acquisition of Dhanlaxmi Bank by Kotak Mahindra or Indusind Bank was in the works.
However, Mumbai-based NBFC, Niche Financial Services Private Limited has now entered the limelight. The bank proposes to allot 1.28 crore equity shares to the company on a preferential basis. However, the entity does not own a single share of the bank. Conventional estimates say that Niche Financial would invest Rs 47 crore in the bank going by present rates. (The share price was Rs 36.90 on closing on April 10). Post the preferential share issue, Niche Financial will hold 4.99 per cent of total shares in the bank.
“Dhanlaxmi Bank was often referred to as a take over target in the banking sector for quite some time. Now, with the recent spurt in share price, it seems that talks have become serious. The time is also ripe as mergers and acquisitions have become the new normal in the banking sector,” said Mohanan, a former Dhanlaxmi Bank senior manager and trade union leader.
Dhanlaxmi Bank reported a net loss of Rs 8.18 crore in the third quarter ended December 31, 2016 and hence C D Joson, Kerala state convener, United Forum of Bank Unions says no public sector bank will be interested in Dhanlaxmi.