The Cabinet on Wednesday approved the purchase of up to 51% stake in IDBI Bank by Life Insurance Corporation of India (LIC), interim finance minister Piyush Goyal said. LIC, which holds 7.98% in IDBI Bank, will have control of the state-run lender and get the status of a promoter.
Backed by the government, LIC will seek a “special dispensation” from the RBI to give the insurance behemoth some time to reduce its stake in some other banks, including Axis Bank and PNB, to below 10% to meet a regulatory requirement, a source said.
The deal will involve preferential allotment of shares to LIC by the stressed bank, instead of an outright sale of the government’s stake in the bank to the insurance behemoth. An open offer by LIC could also take place, though the public shareholding is small, the source said.
Responding the news of the CCEA decision, shares of IDBI Bank jumped as much as 5.61% to `62.15 on the BSE, when the Sensex dropped 0.23%.
HCL gets nod for QIP
The Cabinet on Wednesday approved the proposal of Hindustan Copper (HCL) to raise about `900 crore through a qualified institutional placement (QIP) to fund expansion. The copper miner will issue fresh equity shares to the extent of 15% of paid-up equity capital of face value of `5 each via the QIP route.Post the equity issue, the Centre’s shareholding will come down to 66.13% from 76.05%.
Unconventional hydrocarbons policy approved
With the aim to attract new investment in hydrocarbon exploration and production and increase chances of finding new discoveries that will boost domestic production, the Cabinet on Wednesday approved the policy framework for exploration and exploitation of unconventional hydrocarbons. The policy will allow exploration of unconventional hydrocarbons – shale oil or gas and CBM – under the existing production sharing contracts, CBM contracts and nomination fields “to encourage existing contractors in the licensed/leased area to unlock the potential of unconventional hydrocarbons in the existing acreages”.