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IDBI Bank on Friday said its board will meet on October 4 to consider preferential allotment of equity shares aggregating to 51 per cent of the post-issue paid-up capital of the bank to Life Insurance Corporation of India (LIC).
The meeting will also consider the modalities for conducting postal ballot for obtaining shareholders’ approval for the preferential issue of capital to LIC.
The bank, in a notice to the exchange, said it has received a letter from LIC conveying approval of its Board of Directors for subscribing to its equity capital.
The subscription through preferential issue/open offer will see the life insurer holding up to 51 per cent of the bank’s post issue subscribed paid-up capital.
“The bank has received letter dated September 27, 2018, from LIC conveying approval of their Board of Directors for subscribing to the equity capital of IDBI Bank...as an acquisition of controlling stake as promoter in IDBI Bank and consequential Amendment in Articles of Association of the bank,” it said.
LIC is expected to pump in ₹10,000-12,000 crore to take its stake up to 51 per cent in IDBI Bank, from 7.98 per cent as at June-end 2018. The government held 85.96 per cent stake in the bank as at June-end.
The bank, which has been under the RBI’s so-called prompt corrective action framework since May 2017 in view of its high net Non-Performing Assets (NPA) and negative Return on Assets (ROA), has put in place a comprehensive turnaround strategy to improve its financial position.
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