MUMBAI: Shares of Lakshmi Vilas Bank rose 5 per cent in the early trade on Friday on news of Indiabulls promoters exiting the realty business, and closed strong at 73.30, up 4.27 per cent, from the previous day’s close.
The Tamil Nadu-based bank, which is in the process of merger with Indiabulls Housing Finance, is awaiting Reserve Bank of India’s approval. Indiabulls group’s real estate business has been seen as a hurdle in obtaining the nod.
Indiabulls Real Estate, in a late night regulatory filing on Thursday, said the promoters will exit realty business and sell 14 per cent stake to Bengaluru-based Embassy Group for Rs 950 crore.
“In line with company’s promoters’ strategy to focus on financial services in the long run, the promoters intend to dispose of up to 14% of the fully paid-up share capital of the company (out of the aggregate 38.72% fully paid up share capital of the company, currently held by them) to third-party investors,” it said.
Promoters’ stake of 14 per cent, or 6.3 crore shares, were sold through a bulk deal on Friday. Indiabulls Real Estate stock hit a day’s high of Rs 151 in the early trade but closed at Rs 128, down 2.6 per cent from the previous close.
The bulk deal data on the BSE showed Embassy Group had bought the 6.3 crore shares at Rs 150.45 a share. The deal value reflected in the early trading price showed it was valued much higher than the current market price.
Separately, Indiabulls Housing Finance, in a regulatory filing, tried to put to rest speculations on its financial position, detailing timely payments towards non-convertible debentures and giving information on the Rs 28,150 crore cash and investments held by the firm.
It said Rs 11,627 crore was invested in mutual funds, Rs 9,209 crore in certificates of deposit of banks, Rs 3,183 crore in fixed deposits, and Rs 2,840 crore in liquid quasi-sovereign bonds.
The stake sale
Indiabulls promoters’ 6.3 crore shares sold through bulk deal on Friday.
Embassy Group bought them at I150.45 a share, higher than market value.