The govt has approved strategic sale of stakein IDBI bank to handover the charge to a new promoter. The government holds 45.48 per cent in IDBI Bank while LIC holds 49.24 per cent. It was however not clarified how much stake each would sell.
A govt official told Business Standard "A new buyer acquiring the government’s entire stake in the bank would have still left LIC as a co-promoter or a majority shareholder, affecting key decisions. DIPAM will now scout for a buyer that will have to meet the RBI’s fit and proper criteria"
LIC had invested into IDBI in 3 tranches in FY19 at an average cost of Rs 60/share, the current market price for the company is significantly lower which will lead to a hit to the insurers investment.