IDBI to move Government to make LIC promoter

The board of IDBI Bank approved a proposal to seek the government’s approval to allow LIC as a promoter once it acquires majority stake in the bank. In a notification, the bank said that it has received communication from LIC expressing interest in acquiring 51% controlling stake in the bank, through preferential allotment of shares or an open offer. “So, largely the three things to look into are expression of interest by LIC taking a 51% controlling stake, to give them promoter status and to decide upon mode of infusion whether by way of preferential shares or through an open offer,” said B. Sriram, managing director and chief executive officer, IDBI Bank. “LIC will get management control post the deal,” he said. The board of LIC also approved a plan to increase its stake in the bank to 51%. It now holds around 7.5% stake in IDBI Bank. LIC will buy the remaining stake from the government, department of economic affairs secretary, Subhash Garg said. “The banking regulator’s nod will be needed for change in promoter status, acquisition of more than 10% stake, and fit and proper status,” Sriram said. “There is no specific timeline for the stake sale process to be completed.”