IPO-bound LIC to sell all its stakes in IDBI Bank in the next fiscal - Zee Business exclusive report

Life Insurance Corporation of India (LIC) is likely to sell all its stakes in IDBI Bank. The state-run insurer is the largest stake holder in the public sector bank.  

The cash rich LIC has over 49 per cent promoter stake in the IDBI Bank, which is greater than the government’s stake about 45.5 per cent in the bank. Earlier during Budget 2021, the finance minister Nirmala Sitharaman had added IDBI Bank in the privatisation list along with Bharat Petroleum Corporation Limited (BPCL) and Container Corporation of India (Concor). 

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The share price of the bank surged almost 6 per cent during the last hour of Thursday’s session to touch day’s high level of Rs 52.2 per share. The counter closed around 4 per cent higher to 51.55 per share on the BSE, as compared to 1.3 per cent fall in the BSE Sensex. 

The Zee Business report also states that the government is also mulling to sell at least its 25 per cent stakes in the next 5 years. As per Sitharaman’s comment in Budget 2022, the initial public offer of LIC is expected shortly and government has put it on fast-track to meet divestment target of FY22. 

The government is likely to file draft papers for the LIC IPO with market regulator Securities and Exchanges Board of India (SEBI) by next week, while a portion of the issue would be reserved for anchor investors, a top official said on Wednesday, according to PTI news report. 

In an interview with PTI, Tuhin Kanta Pandey, Secretary to the Department of Investment and Public Asset Management (DIPAM), said approval of the insurance regulator is awaited, post which the draft prospectus, detailing the size of the share sale, will be filed. 

LIC's listing is crucial for the government to meet the lowered revenue estimates of Rs 78,000 crore for the current fiscal. The government has so far raised about Rs 12,000 crore from privatisation of Air India and stake sale in other PSUs. 

The government has appointed 10 merchant bankers, including Goldman Sachs (India) Securities Pvt Ltd, Citigroup Global Markets India Pvt Ltd and Nomura Financial Advisory and Securities (India) Pvt Ltd, to manage the mega IPO of the country's largest insurer.