Clix Group Submits A Non-Binding Offer For Lakshmi Vilas Bank

Lakshmi Vilas Bank has received a non-binding offer from Clix Group.

Lakshmi Vilas Bank Mulund branch. (Source: BloombergQuint)
Lakshmi Vilas Bank Mulund branch. (Source: BloombergQuint)

Clix Group made an “indicative non-binding offer” for an investment in The Lakshmi Vilas Bank Ltd.

The offer is in continuation with Pramod Bhasin-led Clix Group’s merger proposal, the bank said in an exchange notification.

In June, Clix Capital Services Pvt., along with group companies Clix Finance Ltd. and Clix Housing Finance Pvt., submitted a non-binding letter of intent for a merger with Lakshmi Vilas Bank. Since then, the non-bank lender has been conducting due diligence. On Sept. 16, the bank informed stock exchanges that major part of the due diligence was over.

The Tamil Nadu-based bank is in dire need of funds as its capital adequacy ratio as on June 30 stood at 0.17%. The merger would help the bank meet its regulatory capital, while Clix Group get access to deposits.

AION-backed Clix Group has a loan book worth Rs 5,000 crore, spread across housing, two-wheeler , business and unsecured personal loans. The business areas are considered complimentary to Lakshmi Vilas Bank's loan book.

Lakshmi Vilas Bank's shareholders also agreed to increase its authorised share capital from Rs 650 crore to Rs 1,000 crore, and also approved fundraising through qualified institutional placement, follow-on public offer or any other route.

Besides the bank’s board and shareholders’ approval, the Clix Group offer would also need to pass the regulator’s scrutiny. In October 2019, the Reserve Bank of India rejected a merger proposal between Lakshmi Vilas Bank and Indiabulls Housing Finance Ltd.

Last month, institutional shareholders voted against appointment or reappointment of seven directors on the board, including S Sundar, the bank’s managing director and chief executive officer. On Sept. 27, the RBI then allowed creation of a committee of directors, which would exercise powers of MD & CEO and conduct day-to-day affairs of the bank.