Housing finance firm, Indiabulls Housing Finance on Friday said promoter stake will drop, which is currently at 21.5 percent to 19.5 percent post-merger with Lakshmi Vilas Bank.

Today, the board of Lakshmi Vilas Bank approved the merger with Indiabulls Housing Finance. Lakshmi Vilas Bank shareholders will get Indiabulls Housing Finance's 0.14 share of face value Rs 2 for every one share of Rs 10.

In an interview to CNBC-TV18, Gagan Banga, vice chairman and managing director, said, "This is an amalgamation and this is not strictly a new bank licence. If you look at how Indiabulls Housing is placed today, it qualifies under all the norms required even for a new bank licence. Most importantly, Indiabulls Housing is a widely held company with over 65 percent institutional ownership and of which, over 56 percent is held by the foreign institution."