The board of state-owned insurance group Life Insurance Corporation of India (LIC) has approved the acquisition of IDBI Bank, another state-owned entity.
The fresh deal is expected to take the insurer’s total stake in the company to nearly 51%, in which it currently holds 7.98% interest.
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Insurance Regulatory and Development Authority of India has already approved the deal, which still requires the consent of the Union cabinet, Securities and Exchange Board of India as well as the Reserve Bank of India.
The LIC is required to make an open offer to the shareholders of the IDBI Bank for the acquisition.
However, Economic Affairs Secretary Subhash Chandra Garg told ETNow that an open offer may not be required as the lender’s public holding is very low.
The acquisition is expected to infuse capital into the debt-ridden IDBI Bank helping it to recover from the financial challenges.
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By GlobalDataIn the March quarter, the lender’s net loss stood at INR56.62bn with non-performing assets of INR107.73bn, a surge of 77.9% year-on-year basis.
Currently, the bank has nearly 2,000 branches and 3,817 ATMs across India including one overseas branch in Dubai.
