SEBI approves LIC's reclassification as public shareholder in IDBI Bank
What's the story
The Securities and Exchange Board of India (SEBI) has approved the reclassification of Life Insurance Corporation of India (LIC) as a public shareholder in IDBI Bank. The move is contingent upon the completion of the lender's strategic divestment process. According to an exchange filing by IDBI Bank, SEBI's approval is subject to several conditions linked to this transaction.
Compliance requirements
Conditions for LIC's reclassification
The conditions for LIC's reclassification include capping its voting rights at 10% and not exercising any control over the bank's affairs. LIC is also prohibited from enjoying any special rights, formally or informally. The insurer will not be represented on IDBI Bank's board or act as a key managerial person. Any breach of these conditions will automatically nullify SEBI's approval for reclassification.
Financial targets
SEBI mandates residual stake reduction
SEBI has also directed LIC to reduce its residual stake in IDBI Bank to 15% or below within two years of the disinvestment's completion. This is in line with the Reserve Bank of India (RBI)'s guidelines. The reclassification will require IDBI Bank to make necessary applications to stock exchanges once the transaction closes. In Q1 FY26, IDBI Bank reported a 17% year-on-year (YoY) growth in standalone net profit at ₹2,007 crore against ₹1,719 crore posted in the year-ago period.