IDBI Bank said it has received government approval for acquisition by Life Insurance Corporation of India. The bank said in a stock exchange filing the government has conveyed its ‘no-objection’ to reduction of government’s shareholding to below 50%, relinquishment of management control in IDBI Bank and acquisition of controlling stake by LIC as promoter. The acquisition is expected to go through preferential issue/open offer of equity, subject to regulatory approval and compliance with laws. Post the transaction, IDBI Bank would become a subsidiary of LIC, which at present, holds 7.98% stake in the bank. The bank is expected to get a capital support of about Rs 130 billion from LIC, depending on the share price of the bank.
