In his Budget speech for 2016-17, then Finance Minister Arun Jaitley had said the process of transformation of IDBI Bank has already started. "Government will take it forward and also consider the option of reducing its stake to below 50 percent," he had said.
As of March 2018, LIC held 10.82 percent in IDBI Bank. The approval from IRDA is mandatory for insurers to invest over 15 percent in listed companies.At 10:08 hours IST, the stock price was quoting at Rs 55.35, up Rs 5.45, or 10.92 percent on the BSE.
share price rallied 12 percent intraday on Friday after media report indicated that the insurance regulator may clear the bank's deal with LIC today. This upside was after the losses seen in previous four consecutive sessions.
The board members of Insurance Regulatory and Development Authority of India (IRDAI) are likely to meet today later in the day, wherein they may clear the deal between IDBI Bank and Life Insurance Corporation of India, reports CNBC-TV18 quoting unnamed sources.
The board is likely to grant exemption to LIC for taking over 15 percent stake in the bank and then LIC may be allowed to buy additional 30 percent stake, taking its shareholding in the bank to over 40 percent.
CNBC-TV18 is learnt that IDBI Bank-LIC transaction may be executed via preferential issuance of fresh equity. "LIC may get 3 board seats as a part of IDBI Bank-LIC transaction but may not be given management control," sources said.
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Source:https://www.moneycontrol.com/news/business/markets/idbi-bank-stock-gains-12-on-reports-that-irdai-may-clear-lic-deal-today-2650401.html
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