IDBI Bank today said it has received approval to bring down the government stake to below 50 percent and get acquired by insurance behemoth LIC. Earlier this month, the Union Cabinet had approved Life Insurance Corp's proposed acquisition of up to 51 percent stake in debt-ridden IDBI Bank.
In a stock exchange filing the state-owned bank said that the government has conveyed its "no objection" to reduction in government's shareholding to below 50 percent, relinquishment of management control in IDBI Bank and acquisition of controlling stake in IDBI Bank by LIC as promoter.
The acquisition of controlling stake by the LIC, it added, 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 LIC, which will have 51 percent stake in it.
Currently, LIC holds 7.98 percent stake in the debt-ridden public sector bank.
Sources said the bank will be get a capital support of about Rs 13,000 crore from LIC, depending on the share price of the bank.
IDBI Bank's shares closed flat at Rs 61.95 a piece on BSE.