Shares of Lakshmi Vilas Bank continued to face selling pressure for the sixth consecutive day and have tanked over 53 per cent during the period amid negative reports around the company.
On Tuesday, the stock plunged 9.88 per cent to Rs 7.30—its lower circuit limit as well as one-year low —on the BSE.
At NSE, it plummeted 9.88 per cent to Rs 7.30—its lowest permissible trading limit for the day.
Since last Tuesday (November 17), the stock has tanked 53.35 per cent on the BSE.
The fall in share price has been attributed in part to the conditions in the RBI's draft scheme of amalgamation. RBI's draft scheme of amalgamation had stated that the entire amount of the paid-up share capital and reserves and surplus shall stand written off. That means minority shareholders will get nothing if the deal goes through and the bank is merged with DBS.
The government had placed Lakshmi Vilas Bank under one-month moratorium, superseded its board and capped withdrawals at Rs 25,000 per depositor.
The step was taken on the advice of the Reserve Bank of India, in view of the declining financial health of the private sector lender.
LVB is the third bank to be placed under moratorium since September last year after the cooperative bank PMC in 2019 and private sector lender Yes Bank this March. While Yes Bank has successfully been revived under the guidance of State Bank of India, the PMC resolution is still a far cry.
(With inputs from Nachiket Kelkar)