IDBI Bank has allotted 15.8 crore equity shares, equal to a 7.16 percent stake, on a special basis to Life Insurance Corporation (LIC), that now has over 14 percent in the state-run lender.
The allotment of shares is a division of IDBI Bank’s plan to offload government shareholding as part of privatisation move. In the Budget speech, Finance Minister Arun Jaitley declared that the procedure of transformation of IDBI Bank has started.
“Government will take it forward and also consider the option of reducing its stake” to below 50 per cent, he said.
On Monday, IDBI Bank in a regulatory filing declared that preferential allotment of 15,87,61,801 shares to LIC happened on March 23, 2016.
Prior to this LIC held a 7.21 percent stake (137,017,058 shares) in the bank. Post-acquisition, the stake of the LIC in IDBI Bank will raise to 14.37 percent or 295,778,859.
shares. Currently, the government holds a 72 percent stake in the bank, down from more than 80 percent earlier. Meanwhile, a segment of IDBI Bank employees today went on a four-day strike to protest the government’s move to privatise the bank.
Prior this month, IDBI Bank chief Kishor Kharat had said that international institutions like CDC of England and GIC of Singapore have shown some concern in buying stake in the bank.