The state-controlled IDBI Bank has announced that the Life Insurance Corporation (LIC) completed the acquisition of 51% controlling stake in the Bank today on 21St January 2019, making the life insurer the majority shareholder of the bank.
IDBI Bank stated that the company “has allotted 82,75,90,885 equity shares to Life Insurance Corporation of India at a price of 60.73 per share (inclusive of premium amount of 50.73 per share) aggregating to Rs. 5025.96 crore in the final tranche II of the Preferential Issue on January 21, 2019.”
The bank said in a statement, “the board of IDBI Bank has in its meeting held on January 21, 2019 approved continuation of office of Shri Rakesh Sharma, Shri K. P. Nair and Shri G. M. Yadwadkar as Directors and as MD & CEO and DMDs respectively of IDBI Bank till such time as the board approves appointment of new MD & CEO and DMDs on the Board of IDBI Bank.
The bank informed, “board has also approved reclassification of LIC as Promoters of IDBI Bank in terms of the shareholders’ resolution passed on November 07, 2018 to this effect.” IDBI Bank in its regulatory filing today also said that the board approved the appointment of Shri Rajesh Kandwal as an Additional Director and LIC’s Nominee Director on the Board of IDBI Bank.
The bank called the deal a win-win situation for both IDBI Bank and LIC, which will enable LIC to have a strategic investment in a large bancassurance channel, thereby increasing its productivity and reducing distribution costs. The deal will also enable the bank to enhance its product offerings, reduce distribution cost, de-risk portfolio and support retail business build.