New Delhi: Only 22 per cent of minority shareholders of IDBI Bank exercised their option of exiting company in open offer floated by Life Insurance Corporation (LIC), which is taking majority stake in debt ridden state-owned bank, sources said.Bulk of minority shareholders, however, continue to hold shares of IDBI Bank indicating their faith in new management, they said.Existing shareholders feel value of their shares going up substantially in future following management takeover by LIC, sources added.The open offer for 2,04,15,12,929 shares was made last month at a price of Rs 61.73 a share.LIC had already increased its holding beyond 44 per cent before open option.In August, Cabinet approved acquisition of controlling stake by LIC as a promoter in bank through combination of preferential allotment and open offer of equity.LIC has been looking to enter banking space by acquiring a majority stake in IDBI Bank, as deal is expected to provide business synergies despite lender's stressed balance sheet.With culmination of deal, LIC will get about 2,000 branches through which it can sell its products, while bank would get massive funds of LIC.The bank would also get accounts of about 22 crore policy holders and subsequent flow of fund.IDBI Bank would get huge amount of low-cost deposits of policy holder and it can also cross-sale products of LIC.
The bancassurance would generate good amount of cash, which according to experts would push them out of red.The bank had reported a net loss to Rs 3,602.49 crore during September quarter of 2018-19.Its gross non-performing assets hit 31.78 per cent (Rs 60,875.49 crore) of gross advances by September 30, 2018, as compared with 24.98 per cent (Rs 51,367.69 crore) in year-ago period.