Life Insurance Corporation has said it has not received any timeline from the government for the stake sale in its subsidiary IDBI Bank.
LIC owns 49.2 per cent of the lender and the government and public own the remaining shareholdings in the bank which was on the verge of collapse before it was forced into the control of LIC weighed by a third of its loans turning dud.
Addressing the media during its maiden earnings call, chairman M R Kumar said the Corporation has no timeline yet for the stake sale. The divestment department is working on it but so far no expression of interest has been called in.
Nor has there been any formal proposal from the department to us, he added.
In its IPO filings in March this year, the insurance behemoth had said that it would retain part of its 51 per cent stake in IDBI Bank to reap the benefits of the bancassurance channel.
The plan is to completely privatize the bank as the government wants to exit it.
IDBI Bank became a subsidiary of LIC with effect from January 2019, following the acquisition of an additional 82,75,90,885 equity shares.
On December 19, 2020, IDBI Bank was reclassified as an associate company due to the reduction of LIC shareholding to 49.24 per cent following the issuance of additional equity shares by the bank under a qualified institutional placement.
LIC had bought a 51 per cent stake in IDBI Bank in 2019 for Rs 21,624 crore at an average price of Rs 61 per share.
Though the bank has come out of the RBI's restrictive actions, its share price has never reached the LIC buy-out level and on Friday it closed down by over 2.5 per cent at Rs 39.85 on the BSE on a day when banking stocks were rallying.
Besides, it also infused Rs 4,743 crore into the lender in October 2019, using policyholders' funds. The bank further raised Rs 1,435.1 crore on December 19, 2020, by way of a QIP which brought down LIC's stake in IDBI to 49.24 per cent.
In November 2018, the RBI granted approval to LIC to acquire additional equity shares in the IDBI Bank to initiate remedial measures and restore the bank's financial health.
The insurer company infused a total of Rs 4,743 crore and acquired around 82.8 crore equity shares in 2019 giving it 51 per cent ownership.