India July 11(IM): State-owned insurer LIC is all set to make an open offer to the minority shareholders of IDBI Bank, as per media reports. The insurer is all set to acquire a 51% stake in the embattled bank. This was after LIC didnt receive any relaxation from markets regulator Sebi.
As per Sebis rules, an acquisition of more than 25% in a listed entity is termed as control and requires an open offer. Following this news, IDBI surged ~6.5%.
Earlier, insurance regulator IRDAI had already given its go-ahead to LIC for the purchase. This move will reportedly give the debt-laden bank a relief of about Rs10,000-13,000cr.
IRDAIs assent was also deemed surprising because, according to the existing rules, an insurance company cannot own more than 15% shares in any listed financial firms.
IDBI Bank share price is currently at Rs56.75, up Rs3.55, or 6.67%, from its previous close of Rs53.20 on the BSE. The scrip opened at Rs55 and has touched a high and low of Rs58.50 and Rs54.60, respectively. So far, 4,69,57,830 (NSE+BSE) shares have been traded on the counter. The current market cap of the company is Rs22,243.93cr.