Dhanlaxmi Bank Ltd. has announced that it proposes to raise up to Rs.290.53 crore by way of preferential allotment of equity shares to a group of private equity and institutional investors.
As part of its future growth strategy, the bank intends to use the capital to support its growing business needs and expansion plans, while further strengthening its capital adequacy ratio, a press release said here on Saturday.
The bank proposes to issue and allot an aggregate of up to 2,07,52,000 equity shares of face value of Rs.10 each at a premium of Rs.130 per equity share, aggregating to an issue price of Rs.140 per equity share. It plans to allot up to 51,88,000 equity shares each to WCP Mauritius Holdings (Wolfensohn Capital Partners), Customers Bancorp Inc., MKCP Mauritius Master Holdings II Ltd. or any subsidiaries or affiliates (Mount Kellet Capital Partners), up to 36,31,600 to Multiples Private Equity FII, and up to 15,56,400 to Multiples Private Equity Fund.
Amitabh Chaturvedi, Managing Director and Chief executive Officer of the bank, said in the release that the response from long-term investors endorsed the faith reposed by all stakeholders in the bank's strategy, robust business model, and its commitment to deliver superior shareholder value.
The preferential issue proposes to increase the overall capital adequacy ratio of the bank to over 15 per cent and Tier-I capital adequacy ratio to over 12 per cent as per Basel-II (based on assets as on March 31, 2011). In addition, the issue proposes to increase the equity share capital up to Rs.105.89 crore and the total shareholders' funds up to Rs.1,135.17 crore, leading to a dilution of up to 19.6 per cent on the expanded capital base. The proposed allotment of shares is subject to the approval of shareholders by a special resolution and relevant statutory and regulatory authorities. In January, the Board of Directors had approved the proposal to raise equity capital of up to Rs.1,000 crore by issue of equity shares not exceeding 5.5 crore equity shares of face value of Rs.10.