In a key development for IDBI Bank's ownership structure, the Securities and Exchange Board of India (SEBI) has approved the reclassification of the Life Insurance Corporation of India (LIC) as a public shareholder, the lender informed the stock exchanges. The move marks a crucial step in the bank's transition following the government's strategic disinvestment.
As per SEBI's directions, LIC's voting rights in IDBI Bank will be capped at 10% of total net effective voting rights. The insurer will not exercise any control over the bank's affairs, nor enjoy special rights related to the lender. Further, LIC will have no representation on the board of directors, the filing said.
LIC's intention to seek reclassification of its residual stake will be outlined in the letter of offer to shareholders in connection with the open offer made by the new acquirer pursuant to the strategic disinvestment of the bank. Importantly, LIC is required to pare down its holding to 15% within two years from the closing date of the strategic disinvestment transaction.
With SEBI's approval, IDBI Bank will now approach stock exchanges for the formal reclassification. The development is viewed as a significant milestone in the bank's privatization journey, aligning its shareholding structure with regulatory norms.
On August 21, Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla told NDTV Profit that the expression of interest exercise for IDBI Bank's stake sale has been completed, and due diligence is currently underway. The government expects to invite bids for the stake sale by the third quarter of this fiscal.
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