The proposed stake sale in private sector insurer IDBI Federal Life Insurance may have been put on hold due to lack of interest among potential buyers.
IDBI Federal Life is a three-way joint venture between IDBI Bank, Federal Bank and Belgian insurer Ageas.
IDBI Bank, which owns a 48 per cent stake in the insurer (the other two hold 26 per cent each), has been keen to sell its stake for about ₹3,000 crore to help clean up its balance sheet. Companies including Max Life Insurance, Birla Sun Life and Exide Life Insurance were reported to have shown an interest in the sale. “The stake sale is presumably on a backburner as the company hasn’t got any bidders,” Vighnesh Shahane, CEO and Whole Time Director, IDBI Federal Life Insurance, told
For FY18, the insurer reported a 94 per cent increase in its net profit to ₹101 crore.
Meanwhile, state-owned Life Insurance Corporation of India is acquiring a majority stake in IDBI Bank for close to ₹13,000 crore. LIC is expected to complete the acquisition in a few months and spell out its strategy for the lender.
Shahane is optimistic that LIC’s move will not affect operations at IDBI Federal Life, or have any regulatory impact. “LIC has already received regulatory approval. The stake acquisition is in the parent, IDBI Bank,” he said.
IDBI Bank was earlier looking to raise capital through the sale of its non-core assets. Market experts said that with LIC picking up a stake in the bank, a stake sale in its life insurance joint venture may not even be required.