Big news for IDBI Bank investors! What is LIC going to do? Anil Singhvi clears the air about stake sale reports
A big news is emerging on IDBI Bank. This is regarding the stake of Life Insurance Corporation of India (LIC) in the bank. Zee Business' Anurag Shah brings this big breaking news for the Zee Business readers. After the government’s decision to sell its 47 per cent stake in IDBI Bank, there was much speculation that the state-run insurer LIC is also planning to sell its stake
A big news is emerging on IDBI Bank. This is regarding the stake of Life Insurance Corporation of India (LIC) in the bank. Zee Business' Anurag Shah brings this big breaking news for the Zee Business readers. After the government’s decision to sell its 47 per cent stake in IDBI Bank, there was much speculation that the state-run insurer LIC is also planning to sell its stake. Citing his sources, Shah said that LIC is unlikely to reduce its stake in IDBI Bank for now.
The rationale behind this is that LIC bought 51 per cent stake in IDBI Bank in two tranches at Rs 54 per share and the current rate of the share is less than this amount, Shah said.
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LIC is of the view that the investment that was made in the company was done with an objective of earning profits. At the current juncture it is not important to reduce its stake in the bank, Shah said citing the sources.
At 10:54 am, IDBI Bank share price was trading around Rs 42.30 on the NSE, up by over 3 per cent from the previous close.
As per the regulatory norms, LIC has 12-year time frame to remain invested in IDBI Bank and it has 10 years left, he further said. Moreover, the Insurance Regulatory and Development Authority of India (IRDAI) has also not given any timeline to LIC to reduce its stake in IDBI Bank till now, he said.
LIC is also of the view that IDBI Bank has posted good results over the last three quarters and is now profitable and is also likely to come out of PCA (Prompt Corrective Action), going forward, he said. The roadmap for IDBI Bank looks promising too, Shah said quoting his sources.
So, in the near future, there are no plans of LIC – the biggest stake holder in the bank to reduce its stake, Shah said.
Anil Singhvi on LIC-IDBI Bank development
The Zee Business Managing Editor called this a"big development". He said that LIC has 12 years to reduce its stake which is a sufficient period. Moreover, LIC’s investment is with a view to earn profits and now that it is the promoter, it has expressed it clearly that it was in no hurry to sell its stake in IDBI Bank.
He said that IDBI Bank stake sale is not going to happen below Rs 54 and there is still a Rs 12 margin to reach there.
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So, there is no sword hanging for investors regarding the stake sale and the path is quite clear from here, the Market Guru said.
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