Dhanlaxmi Bank to raise another Rs 700 crore in next 6 months

Having raised Rs290-crore of core Tier-I capital through a preferential allotment, south-based Dhanlaxmi Bank is planning to raise another Rs700-crore in the next six months, a top bank official said.

"We have an enabling resolution from our Board for raising Rs1,000-crore. We will raise the remaining Rs700 crore in 5-6 months," the bank's managing director and chief executive, Amitabh Chaturvedi, told PTI here.

He, however, did not specify which route the bank will be adopting for raising the fresh capital.

The capital raised will be deployed for lending activities and Chaturvedi said the bank needs to keep on augmenting its capital base on a regular basis because of its high credit growth.

"We achieved a credit growth of over 75% last fiscal (FY 11) and this year also, we expect it to be the same. We will require more capital," he said.

The bank's total capital adequacy stands at 11.3% currently which will go up to 15% once the Rs290-crore comes in.

 Earlier last week, the bank announced it will be raising Rs290.53-crore through a preferential issue of equity shares to a group of four private equity funds.

The investment by the funds -- WCP Mauritius Holdings (Wolfensohn Capital Partners), Customers Bancorp Inc, MKCP Mauritius Master Holdings II and Multiples Private Equity --has a lock-in of one year. The fresh issue will result in the holding of each of the 50,000-odd existing shareholders getting diluted by 20%.

The allotment has taken place at more than 15% premium over the scrip's trading price on the Bombay Stock Exchange.