Dhanlaxmi Bank fell 0.9 percent on Tuesday, October 25, after the Reserve Bank of India (RBI) placed the bank under strict monitoring in the wake of a court battle pursued by a group of shareholders. As on 11.25 pm, the stock was trading flat.
RBI has been monitoring the bank closely after the bank delayed capital raising plans. Moreover, a section of shareholders of the bank have called for an extraordinary general meeting to suspend powers of the managing director and CEO of the bank.
Nine shareholders, who together have about a 13 percent stake in the bank, have called the EGM, according to the exchange filing. Apart from Pillai, the shareholders are B Govindan, Hareendran C K, Rajesh K, Vincent C.D, Vipin A. S, Sreedevi K, George Kollannur and B Sasidharan.
During Tuesday’s trade, the stock opened at a price of Rs. 11.60 per share against the previous close of 11.65 and touched an intraday high and low of Rs. 11.70 and Rs. 11.55, respectively ,during the early trading session.
The stock touched a 52-week-high of Rs. 16.40 on October 22, 2021 and a 52-week-low of Rs. 10.70 on June 20, 2022, indicating that at the current level, the stock is trading at just 8 percent above its 52-week low and 29 percent below its 52 week high.
The stock has given a negative return of 22.5 percent to its shareholders year-to-date. In the last six months, the stock dropped nearly 13 percent and it lost 90 percent of its value in the past five years.
On Thursday, October 20, Dhanlaxmi Bank said its largest shareholders were seeking to curb the spending powers of its chief executive officer, escalating a bitter shareholder battle with the private lender's management, ET reported.
The Kerala-headquartered bank will hold an extraordinary general meeting on November 12 at the request of certain shareholders, including B Ravindran Pillai, who holds a 9.99 percent stake in the bank, the official report stated.
Dhanlaxmi Bank shareholders have expressed worry about the bank's deteriorating financial status and escalating expenses. They seek to suspend powers exercised by CEO Shivan JK in respect of all capital and revenue expenditure, except statutory payments such as salaries and wages.
After three straight quarters of profits, the company reported a loss of Rs. 26.43 crore in the quarter ending June 30, 2022. The company witnessed a QoQ revenue decline of 21.99 percent, lowest in the last 3 years.
Dhanlaxmi Bank Limited is an India-based bank with a market capitalisation of 294.76 crores, engaged in providing a range of banking and financial services, including retail banking, corporate banking and treasury operations. The company provides personal banking, corporate banking, non-resident Indian (NRI) banking, micro and agri-banking, small and medium enterprises (SME) banking and financial planning services.
