IDBI Bank Board Approves Promoter Status For LIC
IDBI Bank approves the preferential allotment to LIC, allowing the insurer to raise its stake to 51%.
The board of IDBI Bank Ltd. on Thursday approved a preferential allotment of shares to Life Insurance Corporation of India and also reclassified the insurer as its promoter.
At a meeting held on Thursday, the Board of Directors “approved the preferential allotment of equity shares to LIC aggregating up to 51 percent of post issue paid up capital of the Bank...” said the lender in a notification to stock exchanges. On Wednesday, the bank had informed exchanges that it had received Securities and Exchange Board of India's approval for the issue.
The re-classification of LIC as the promoter of the bank consequent upon acquisition of 51 percent controlling stake by them in IDBI Bank has also been approved, the notification added.
In addition, the board has approved an increase in the authorised capital from Rs 8,000 crore to Rs 15,000 crore. An alteration on the bank’s articles of association to allow for the stake transfer has also been approved.
The board approval takes LIC one step closer to completing the acquisition of majority stake in IDBI Bank. The government had approved the transaction in August. Subsequently, it was approved by the board of LIC in September.
The final approval for the transaction would need to come from the Reserve Bank of India.