MUMBAI: The Reserve Bank of India (RBI) on Wednesday rejected the proposed merger between Lakshmi Vilas Bank and Indiabulls Housing Finance Ltd, the news that grabbed the headlines for the past few months.
An Indiabulls statement said RBI had disallowed the voluntary amalgamation of the company with Lakshmi Vilas Bank. “Now that the merger will not happen with Lakshmi Vilas Bank, the uncertainty of last 5 months on the business is lifted and the company will focus on its growth of the core business of housing finance,” the statement added.
Indiabulls Housing Finance said that from its core business, the company has paid a total of Rs10,530 crore ($1.5 billion) in dividends translating to total dividends of Rs271 per share on a Rs2 paid up share to its shareholders in the last 10 years.
The company said it would continue with its policy of quarterly dividends going forward. Indiabulls has strong net worth of approximately Rs19,000 crore ($2.7 billion) and healthy liquidity and cash balances of over Rs18,000 crore ($2.5 billion) as on date.
The company has announced a board meeting on October 14, 2019, to consider buyback of its shares, subject to the board approval.
Uncertainty around the banking regulator’s approval has been an overhang on the two stocks, with shares of Indiabulls Housing losing 73.45 per cent and Lakshmi Vilas Bank losing 71 per cent since the all-stock merger was announced in April.