India News
Search Web Directory
News Home
LIC board gives approval to acquire 51% stake in debt-ridden IDBI Bank
Posted on 17th July 2018
Life Insurance Corporation of India (LIC) came a step closer in acquiring a majority stake in the government-owned IDBI Bank as its board gave an approval to the deal on Monday.

LIC’s shareholding in IDBI Bank will stand at 51 per cent after it takes a series of approvals from the Reserve Bank of India, the Securities and Exchange Board of India (Sebi), the government and the bank’s board, Department of Economic Affairs Secretary Subhash Chandra Garg said. Garg is a director on the board of LIC, which owned around 7.98 per cent in IDBI Bank at the end of June. The government owned 85.96 per cent in IDBI Bank at the end of June.

Stock prices of IDBI Bank fell 1.48 per cent to close on the BSE at Rs 56.45 on Monday. LIC will have at least four directors on the board of IDBI Bank following the acquisition, an official said. The ailing bank will issue preferential shares to LIC to raise capital in one go.

“IDBI Bank needs capital, so they will issue preferential shares. The other way is that they (LIC) can buy from the government but that does not provide capital to IDBI Bank. That’s why this (issuing of preferential shares) is the preferable mode to do it,” Garg said. IDBI Bank is expected to get Rs 100-130 billion from LIC through acquisition of stakes, sources said.

However, the government did not provide much clarity on the issue of LIC making an open offer to IDBI Bank’s shareholders.

“The open offer itself may or may not come about, as public shareholding is small. It is only about 5 per cent. The pricing formula may not be attractive. But they will go through that process. If necessary, they will make an open offer. It is not a very material issue in this context,” Garg said.

According to Sebi guidelines, an acquisition of more than 25 per cent in a listed entity is termed control and requires an open offer. Under an open offer, the acquiring company must make an offer to existing shareholders to buy an additional stake in the company. It is aimed at providing the shareholders an exit option as there may be a management change after acquisition and investors may perceive potential risks in the business.

According to a government official, LIC will be able to reduce operating costs, diversify, deepen distribution, and create synergies between LIC’s distribution network and the bank’s network, “fulfilling the objective of providing both insurance and banking solutions”.

LIC will be able to sell its products through 2,000 branches of IDBI Bank and the bank will be able to utilise the funds of the insurance behemoth. The bank would also get accounts of about 220 million policy holders and subsequent flow of fund.

The move will also help the bank access new funds as a result of payout of LIC claims.

IDBI Bank will become a subsidiary of LIC on the lines of LIC Housing Finance, LIC Mutual Fund and LIC Pension Fund.

LIC has a shareholding in all public sector banks and 13 private banks at present and it had investment assets worth Rs 25 trillion at the end of March 2017. On the other hand, IDBI Bank is in a bad shape with its gross non-performing assets (NPAs) soaring to 27.95 per cent of its loans at the end of March 2018.

The bank reported a net loss of Rs 56.7 billion in the fourth quarter of last financial year due to higher provisioning for NPAs.

Related Companies: LIC Housing Finance Ltd   

Other Latest News
NASSCOM inks MoU with Dubai Internet to expand Indian SMEs in MENA region
Posted on 1st October 2018
IT industry body NASSCOM has signed an MoU with a leading technology community here to help small and medium-sized Indian enterprises expand their operations in the Middle East and North Africa region.

The MoU between the National Association of Software and Services Companies (NASSCOM) and the Dubai Internet City (DIC) is first of its kind in the Middle East and North Africa (MENA) region.

Coal India to increase tenure of supply pacts with steel industry to 10 yrs
Posted on 19th October 2018
Coal India has decided to increase the tenure of fuel supply pacts to be signed with the steel industry to 10 years with a view to reducing the sector's reliance on imports for the fuel, according to a notice.

The new FSA tenure would be applicable from the fourth tranche of the auction of coking coal linkages for the steel sector to be held shortly, Coal India said in a notice to its subsidiaries.

IT shares trade weak; TCS hits 3-mth low, Infosys, HCL Tech down 4% each
Posted on 19th October 2018
Shares of information technology (IT) companies were trading lower at the bourses with Tata Consultancy Services (TCS), Infosys, Tech Mahindra and HCL Technologies falling up to 4% on the National Stock Exchange (NSE).

Mindtree, Sonata Software, Mphasis, Trigyn Technologies, Larsen & Toubro Infotech, Hexaware Technologies and Mastek were down in the range of 4% to 15%. At 01:41 pm,

Sensex cracks 408 points on global sell-off; Nifty below 10,400
Posted on 19th October 2018
The benchmark BSE Sensex sank over 408 points in early trade on Friday on heavy selling in IT, energy and banking stocks triggered by weak trends in global markets.

The broader NSE NIfty dipped below the 10,400-mark as 32 of its constituents led by Indiabulls Housing Finance dropped. The NSE Nifty index fell 80.85 points, or 0.77 per cent, at 10,372.30.

Former SBI Chairman Arundhati Bhattacharya joins Reliance Industries’ board
Posted on 19th October 2018
Former SBI chairman Arundhati Bhattacharya has joined the Reliance Industries board as an independent additional director, the Mukesh Ambani-led conglomerate said in a regulatory filing. She has been appointed for five years starting October 17, 2018, subject to shareholder approval, the statement further said.

» Post a FREE Classified Advertisement
Inviting Real Estate Agents, Job Placements Agents, Educational Institutes, Software Service Providers, Real Estate Builders, Marriage Bureaus, Travel Agents, Restaurant Owners, Health & Fitness Centers and other Local Businesses to Post a FREE Classified Advertisement on Classifieds Website.
Jobs in India India Real Estate Automobiles Matrimonials Beauty & Fitness

Add a comment for LIC board gives approval to acquire 51% stake in debt-ridden IDBI Bank
Please only use this form to enter comments on the above company. All comments are reviewed before they are displayed on the web site. Not all comments may be displayed. Check back with us to see if your comments have been displayed.
If you want us to email the comments posted by users, please Subscribe by email
Security Code*

Be the first person to write a business review for LIC board gives approval to acquire 51% stake in debt-ridden IDBI Bank

Most Read News

Rupee weakens 9 paise to 73.92 against US dollar in early trade

Rs 15,000 crore in 5 days: Amazon, Flipkart clock record numbers during festive sales

Air India pilots keep flying despite takeoff mishap

Good news: Pink Line Delhi Metro to open by Diwali

ICICI Bank gets RBI clearance to appoint Sandeep Bakhshi as its MD and CEO

More India News

  India Web Directory
Business Profiles
Automotive Directory
IT/ITES/BPO Directory
Hotel Directory
Health Directory
Business Directory
Gems & Jewellery
Education Directory
Real Estate Directory
Agriculture Directory
Logistics Directory
Yellow Pages
NRI Guide
Photo Galleries
Global Web Directory
*** FREE India Classifieds
Order Premium Listings
Submit a Site
Business Reviews
About us
Link to us
Contact us
Google Search Keywords: India Catalog, IndiaCatalog, India Web Directory
    © 1999 - 2018
    All Rights Reserved
Privacy Statement