Dhanalakshmi in talks with LIC, GIC to help rights issue sail through

Following the lukewarm response to its rights issue, Dhanalakshmi Bank is in talks with several institutional investors to ensure that the issue succeeds. This is despite the fact that the bank has extended the issue by a month in March. The Rs 198.7-crore rights issue, priced at Rs 62 per share, closes on April 17. But with the bank share being traded currently in the range of Rs 62 to Rs 63, investors have kept away from it. The issue which was earlier scheduled to close on March 19 was extended by a month following the poor response. It is imperative for Dhanalakshmi Bank to raise the capital since RBI has stipulated that all private banks should have a net worth of Rs 300 crore. Currently, the bank’s capital stands at Rs 130 crore and the rights issue would add about Rs 198.7 crore if it’s fully subscribed. RBI had indicated that new licences will be issued only after the bank increase its capital.