NEW DELHI:The Board of Life Insurance Corporation of India (LIC) will meet on Tuesday to decide on the modalities for increasing stake in debt-ridden IDBI Bank to 51 per cent, a move that will provide the insurance major entry into the banking space.
The Board will discuss timeline for the open offer, board-level appointments and future strategy for revitalising IDBI Bank, sources said. It will also authorise LIC to appoint a merchant banker and a legal advisor to carry out the acquisition process. The insurer will be asked to do due diligence of the bank and then proceed for various regulatory clearances, sources added.
Meanwhile, LIC is in the process of picking up additional 7 per cent stake in IDBI Bank through preference shares. With this, 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 by LIC will help the lender to meet the intimidate capital requirement to meet regulatory norms by Q2.