MUMBAI: IDBI Bank on Saturday mentioned it is going to promote a part of its stake in IDBI Federal Life Insurance coverage to Belgian multinational insurance coverage firm Ageas Insurance coverage and Federal Bank. Ageas will purchase 23% stake, whereas Federal Bank will purchase 4%, the lender mentioned in a disclosure to the stock exchanges.
The complete stake sale is valued at ₹595 crore. The sale will probably be accomplished publish all regulatory clearances.
IDBI Bank has 48% stake within the life insurance coverage firm, whereas Federal Bank and Ageas Insurance coverage have 26% every. After the completion of the stake sale, IDBI Bank’s share within the insurance coverage entity will fall to 21%.
The intent to sale stake within the insurance coverage firm was first introduced in February 2017. The plan was, nevertheless, shelved and revived in April this 12 months.
Final January, Life Insurance coverage Company India (LIC) had acquired a 51% stake in IDBI Bank, ending uncertainty over the way forward for the lender which had been operating into losses for a number of consecutive quarters.
The stake sale of IDBI Bank’s insurance coverage enterprise was crucial resulting from regulatory necessities. India’s insurance coverage legal guidelines don’t enable an insurance coverage firm to personal a major stake in a rival insurer. Given LIC’s stake in IDBI Bank, it was exerting an oblique possession and management in IDBI Federal Insurance coverage.