NEW DELHI: The Board of Life Insurance Corporation of India (LIC), which met on Tuesday to decide on the modalities and timelines for increasing stake in the debt-ridden IDBI Bank to 51 per cent, is seeking market regulator SEBI’s approval for making an open offer to minority shareholders of the bank.
Subhash Chandra Garg, Secretary, Department of Economic Affairs, Ministry of Finance, who is also a member on the LIC Board, said that the time table has been decided and an open offer is being explored.
“They (LIC) are exploring an open offer. It will either be an exemption or an open offer,” Garg told reporters after the Board meeting, adding that SEBI will take a call on the same.
“The Securities and Exchange Board of India will decide whether it (open offer) has to be accepted or if an exception will be granted,” Garg added.
Meanwhile, LIC is in the process of picking up additional 7 per cent stake in IDBI Bank through preferential shares. With this, its total holding in the bank would rise to 14.9 per cent. At present, LIC holds 7.98 per cent stake in the public sector bank.
The stake hike will help IDBI Bank meet the immediate capital requirement that will enable it to meet the regulatory norms at the end of second quarter. In August, the Union Cabinet had approved LIC’s proposed acquisition of up to 51 per cent stake in the debt-ridden lender.
The bank, in which the government holds 85.96 per cent stake, had posted a net loss of `2,409.89 crore in the quarter ended June 2018. It had posted gross non-performing assets to the tune of `57,807 crore.