Last updated: 17 Nov, 2020 | 02:11 pm
Brickwork Ratings India has downgraded bonds issued by Lakshmi Vilas Bonds worth ₹50.50 crore. The rating action is as follows:
What led to the downgrade?
There is a significant crisis brewing at Lakshmi Vilas Bank. The bank’s asset quality is significantly deteriorated and the Capital Adequacy remains well below the regulatory limits. The bank continues to be under the Prompt Corrective Action (PCA) framework by the Reserve Bank of India (RBI) from September 2019.
This downgrade could put further pressure on the lenders to Lakshmi Vilas Bank. Religare Enterprises Ltd’s NBFC arm Religare Finvest Ltd (RFL) has about Rs 950 crore dues pending (Fixed Deposit plus interest) from debt-ridden Lakshmi Vilas Bank (LVB). This is now at high risk.
We recommend you to exit your exposure in both of these stocks.(This advisory was sent to shareholders of Lakshmi Vilas Bank and Religare Enterprises On Oct 8th.)