By Vijay Ganeshan IyerLife Insurance Corporation of India (LIC), which is in the process of buying a majority stake in IDBI Bank, is unwilling to offer any premium for the stake deal, sources told ETNow.
LIC is set to pick up to 51 per cent stake in the bank and the deal is expected to be closed in the next two months.
Total outgo for the deal is estimated at around Rs 12,000 crore.Once the transaction is complete, IDBI Bank will become a subsidiary of LIC.The insurance behemoth may seek an open offer exemption from market regulator Securities and Exchange Board of India (Sebi), according to the sources.LIC is expected to arrive at the final share price soon.Shares of IDBI Bank have rallied 30 per cent from July lows.
State-owned IDBI Bank recently reported a widening of loss at Rs 2,409.89 crore for the first quarter to June, hurt by higher provisioning for bad loans.
The bank had logged a loss of Rs 853 crore in April-June of 2017-18.IDBI Bank on August 8 said it has received approval to bring down the government stake to below 50 per cent and get acquired by LIC.Earlier this month, the Union Cabinet had approved LIC's proposed acquisition of up to 51 per cent stake in debt-ridden IDBI Bank.
Currently, LIC holds 7.98 per cent stake in the public sector bank.