The Central government has considered eliminating some of the stakes of Life Insurance Corporation of India (LIC) in IDBI Bank as part of its divestment process. However, the decision has not been taken yet and the matter was discussed during consultations on the government’s aim to exit from IDBI Bank, as per a release in cnbctv18.
Insurance Regulatory and Development Authority (IRDA) has set a 12-year time frame for LIC to exit from IDBI Bank but there is no bar on the corporation to exit the bank before this period. Sources have indicated that such decisions will be guided by valuations.
Finance minister in the budget had said that there is a proposition to sell the balance holding of the government of India in IDBI Bank to private, retail and institutional investors through the stock exchange. But the government is still deciding whether it will sell its equity in IDBI Bank in tranches and the quantum or as a single offer for sale.
The government currently holds close to 47% and LIC about 51% stake in the lender.
