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IDBI Bank on Tuesday said its board has approved the proposal for preferential issue of capital to the government and other financial institutions aggregating up to ₹2,500 crore.
P Sitaram, Executive Director, said as part of the preferential issue of capital, the government will infuse ₹1,900 crore and the balance could come in from financial institutions such as Life Insurance Corporation of India.
As at December-end 2016, the government and LIC held 73.98 per cent and 14.37 per cent stakes, respectively, in the public sector bank.
“If the government alone infuses capital then its stake could go beyond 75 per cent. If other financial institutions also pitch in then the government’s stake will be slightly below 75 per cent,” said Sitaram.
The bank, in a stock exchange notice, said the capital infusion is subject to statutory/regulatory approvals.
IDBI Bank shares closed at ₹77.40 apiece, down 0.32 per cent over the previous close on the BSE.
Meanwhile, the bank, in a stock exchange notice, said the government has appointed Mukesh Kumar Jain, currently MD and CEO of Indian Bank, as its MD and CEO for the remaining period of his current tenure or until further orders, whichever is earlier.
IDBI Bank’s present MD and CEO Kishor Kharat will replace Jain at Indian Bank.
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