IDBI Bank on Tuesday said that it will consider seeking shareholders’ nod for the preferential issue to LIC, aggregating up to 14.90 percent of post issue paid up capital, at its board meeting on August 31.
IDBI Bank-LIC deal: IDBI Bank on Tuesday said that it will consider seeking shareholders’ nod for preferential issue to LIC, aggregating up to 14.90 percent of post issue paid up capital, at its board meeting on August 31. “The Board of IDBI Bank at its meeting to be held on August 31, 2018 will consider the proposal for seeking shareholders’ approval through Postal Ballot under section 62(1)(c) of the Companies Act, 2013 for Preferential Issue of Capital to LIC, aggregating upto 14.90% of the Bank’s post issue paid up capital,” IDBI Bank said in an exchange filing.
The lender also informed that LIC has given “in principle approval for subscription of the equity shares on preferential basis subject to their total exposure not exceeding 14.90 percent of post issue capital of IDBI Bank at any point of time.”
Earlier, the government gave approval to transfer of 51 percent shareholding in the government-owned bank to country’s largest insurer. Nevertheless, approvals from the insurance regulator IRDAI as well as RBI are needed in this regard.
With LIC giving its in principle approval for equity shares subscription, it is being seen as a first step towards taking majority ownership in IDBI Bank.
From the lows in July, IDBI Bank shares have rallied 30 percent till date. The bank posted a loss of Rs 2,409.89 crore for the first quarter ended June due to higher provisioning for bad loans. A loss of Rs 853 crore was reported by the bank in April-June of 2017-18.
The shares of IDBI Bank ended the day at Rs 60.85 down 0.73 percent on BSE today.