Date:31/03/2004 URL: http://www.thehindubusinessline.com/2004/03/31/stories/2004033102381300.htm

Back Renaissance's Dalmia picks up stake in Lakshmi Vilas Bank

Deeptha Rajkumar

MR Abhishek Dalmia of the New Delhi-based Renaissance Group has picked up a 2-per cent stake each in Lakshmi Vilas Bank and the Delhi-based real estate and construction company Unitech.

Informed sources told Business Line that this would translate into around 2.3 lakh shares of Lakshmi Vilas Bank and around 2.5 lakh shares of Unitech. Lakshmi Vilas Bank has an equity capital of Rs 11.5 crore while Unitech has an equity capital of Rs 12.5 crore.

The shares were mopped up by Mr Dalmia's investment vehicles, Uttkal Investments and Renaissance Asset Management Company Ltd, via the capital market over a period of two months.

When contacted, Mr Chaitanya Dalmia, Director, Uttkal Investments, said the move was one of passive investment. "It's more of a long-term value pick. Lakshmi Vilas is a value stock, given that it is difficult to find a stock quoting at a discount to the book value in the banking universe. Additionally, it is a high-dividend yield stock. Unitech is more of a growth story. Its huge order book, a 55 per cent stake in the Delhi Airport, Hotel Raddison, etc., make it an attractive investment," he explained.

Touted as a takeover candidate, Lakshmi Vilas Bank has been on the market radar for quite some time now. According to senior analyst Mr Arun Khurana of Prabhudas Liladher, Lakshmi Vilas Bank is quoting at a 25 per cent discount to the adjusted book value for fiscal '05. "This at a time when almost all the banking stocks are quoting at a premium to adjusted book value. In fact, this company is available at a 70 per cent discount to one of the leading NBFCs," he added.

On Unitech, analysts maintain that the company's three business divisions, real estate, construction and hotels, are doing well. "It's a healthy mix of hotel and infrastructure. In fact, its hotel business has contributed significantly to the company's bottomline. The company also recently bagged the contract to build three flyovers in Delhi," an analyst tracking the company said.

The stock of Lakshmi Vilas Bank ended the day at Rs 123.55, up 3.48 per cent, with around 32,586 shares traded on the NSE. The stock of Unitech ended the day at Rs 85.75 on the BSE and Rs 86.55 on the NSE.