More Indian Banks May Be Targets After Indiabulls-Lakshmi Deal

More of India’s smaller banks may become acquisition targets if the regulator gives a nod to the proposed merger of Lakshmi Vilas Bank Ltd. and Indiabulls Housing Finance Ltd., according to Credit Suisse Group AG analysts.

If approved, the deal would be the first example of a non-bank financial company like Indiabulls Housing merging with a bank, following the 2016 relaxation of Reserve Bank of India rules. “This may be a catalyst for similar transactions with other small private banks, making them potential acquisition targets,” the Credit Suisse analysts including Ashish Gupta wrote in a note on Monday.