Mumbai: IDBI Bank on Wednesday said it has received government approval for an acquisition by Life Insurance Corporation of India. In a stock exchange filing Wednesday, IDBI Bank said that the government has conveyed its “no objection" to reduction of government’s shareholding to below 50%, relinquishment of management control in IDBI Bank and acquisition of controlling stake by LIC as promoter.

LIC’s IDBI Bank acquisition would be through preferential issue/open offer of equity, subject to regulatory approval and compliance with laws. Post the transaction, IDBI Bank would become a subsidiary of the insurer. LIC, at present, holds 7.98% stake in the bank.

People familiar with the matter said the bank will be get a capital support of about 13,000 crore from LIC, depending on the share price of the bank.

The Union Cabinet had earlier this month approved the LIC-IDBI Bank deal where the state-run insurer would acquire 51% stake in the debt-ridden bank.

On Wednesday, IDBI Bank shares closed flat at 61.95 a piece on BSE even as the benchmark Sensex ended at a record high of 37,887.56 points.

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