Mumbai:
IDBI Bank shares jumped as much as 5.9 per cent to Rs 61.15, their biggest intraday percentage gain since June 7, on the report.that the Government is considering to divest 40-43 per cent stake in IDBI Bank to Life Insurance Corporation of India, potentially yielding it Rs 10,000-11,000 crore.
As per stock exchange data, the Government holds about 81 per cent stake in IDBI Bank, while LIC holds 10.8 per cent as on March 31.
The LIC Board has approved the idea of taking charge of the controlling stake in a bank and will discuss the IDBI Bank stake sale after the government approves the idea, the official told a news agency.
Spokesmen for IDBI Bank and the Finance Ministry said they have no immediate comment. LIC did not immediately respond to a request for comment.
The insurance regulator IRDAI is likely to give LIC an exemption from breaching the maximum company-specific investment limit.Currently, insurance companies are not allowed to own more than 15 per cent in a single company.The insurance regulator may take up the matter during its June 29 board meeting.
The IRDAI would ask LIC to bring down its stake in IDBI Bank over a period of five-seven years. Sources said this would not be a challenge because IRDAI had allowed such exemptions in the past.
Currently, LIC has over 10 per cent stake in six PSU banks, including IDBI Bank. In another four, its stake ranges between 9.5 and 10 per cent.
More than 18.7 million IDBI Bank shares changed hands on Friday, compared with the 30-day average of 12.7 million shares.