Life Insurance Corporation of India on Monday said there is no proposal to merge its subsidiary LIC Housing Finance Ltd. with any other entity.
IDBI Bank Ltd.'s parent company may expedite the process of merging its housing finance arm with the lender, after the latter posts two consecutive quarters of operating profit, the Business Standard newspaper reported Monday, citing sources.
"There was absolutely no proposal to merge LIC Housing Finance with any other entity and all such rumours floating in the market are not based on facts," the state-run insurer said in a clarification. IDBI Bank in a separate filing said that no such proposal has been discussed in its board meeting.
The Business Standard news report follows the government's budget proposal to sell stake in LIC via an IPO and completely exit IDBI Bank to meet its disinvestment target for 2020-21. The lender is currently under the Reserve Bank of India's so-called prompt corrective action framework but aims to exit the same in the ongoing quarter.
In the December quarter, IDBI Bank announced its plan to sell up to 49 percent stake in two subsidiaries— IDBI Capital Markets & Securities Ltd. and IDBI Intech Ltd.—but maintained that the stake sales were aimed at meeting the market regulator's norms and not raise capital.
Also Read: LIC IPO: This Metric Gives LIC A Market Valuation Of Rs 9.5 Lakh Crore
Shares of LIC Housing Finance fell more than 10 percent intraday on the report but pared some of the losses to end the day 7.71 percent lower at Rs 380.30 apiece. IDBI Bank shares fell 2.54 percent to 34.50 each.
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