LIC applies to SEBI for public shareholder tag in IDBI Bank, demands removal of promoter tag
LIC is not considered as a public shareholder of IDBI bank, and according to market experts, it is very unlikely that the regulator will be up for the change in the shareholding classification.
Life Insurance Corporation of India (LIC) has applied to the Securities and Exchange Board of India (SEBI) demanding a public shareholder tag in IDBI Bank and also requested the removal of the 'promoter' tag in IDBI bank.
SEBI is responsible for converting the government's shareholding in IDBI Bank from promoter to public shareholding. And the LIC has demanded that their shareholdings should also come under the category of public shareholding, just like the shares of the government, rather than being counted as 'promoter' holding.
Why LIC is not a public shareholder?
LIC is not considered as a public shareholder of IDBI bank, and according to market experts, it is very unlikely that the regulator will be up for the change in the shareholding classification.
Sources said that it will be difficult for the regulatory body, Sebi, to accept the demand of LIC as LIC holds 49.24 per cent stake in IDBI, and with this shareholding, they cannot be considered as a public shareholder. As per sources, Sebi may not give relaxation to LIC in categorization which they had already given to the government yesterday.
Market experts are of the opinion that LIC has more than 10 percent in IDBI, in such a situation it is very difficult for regulators to change the shareholding classification.
Recent updates of LIC and IDBI
Recently, IDBI Bank signed an agreement on December 29 to transfer schemes from IDBI Mutual Fund (IDBI MF) to LIC Mutual Fund (LIC MF). LIC completed the takeover of IDBI Bank, the sponsor of IDBI Mutual Fund, in January 2019.
On October 7, 2022, the Government of India invited expression of interest (EoI) and offered to sell a total of 60.72 per cent stake in IDBI Bank. The government also later extended the deadline for potential bidders to submit expressions of interest (EoIs) for IDBI Bank to January 7, 2023, which was previously December 16, 2022.
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