New Delhi: Shares of Indiabulls Housing Finance and Lakshmi Vilas Bank plummeted up to 20 per cent on Thursday after the Reserve Bank of India rejected their merger proposal.
Indiabulls Housing Finance (IBHF) stock tumbled 18.02 per cent to trade at Rs 197 on the BSE. In early trade, the scrip touched its 52-week low of Rs 192.65, shedding 19.82 per cent over its previous close.
On similar lines, the scrip fell 17.24 per cent to Rs 198.45 on the NSE. It hit its 52-week low of Rs 192.65, down 19.66 per cent.
Shares of Lakshmi Vilas Bank (LVB) sank 5 per cent to hit lower price band as well as one-year low of Rs 25.65 on the BSE. The scrip was trading at its lower price band and 52-week low of Rs 25.65 on the NSE too, cracking 4.82 per cent.
The Reserve Bank on Wednesday rejected non-banking lender IBHF's proposal to merge with the capital starved private sector lender LVB. Both LVB as well as IBHF informed the bourses late Wednesday evening about the RBI decision, but did not specify the reasons for the same, which however, for many was in the offing given the regulator's stated opposition to corporates and realty-focused entities entering the banking arena.
The merger proposal had already received all other approvals, including those from the fair trade watchdog. "The Reserve Bank has informed us that the application for voluntary amalgamation of IBHF and Indiabulls Commercial Credit with LVB cannot be approved," LVB informed the exchanges.
Meanwhile, Indiabulls Housing Finance informed the exchanges on Wednesday after trading hours about a board meeting scheduled for Monday, October 14, to consider the proposal of buyback of equity shares of the company.