Tag : AIIDBIOA

New Delhi: "The LIC had bought the IDBI Bank (NS:IDBI [https://in.investing.com/equities/idbi-bank])'s shares at about Rs. 61 per share. The total investment of LIC policyholder's money in the deal was about Rs. 25,000 crore," Vithal Koteswara Rao A.V., General Secretary, All India IDBI Officers Association (AIIDBIOA) told IANS. The IDBI Bank's shares are being traded on the bourses in the Rs.35 band. Further, IDBI Bank also sells the life insurance policies of LIC and once it goes out of its fold, the life insurer may lose out a major distribution channel. Currently, a bank can sign up with only three life insurers to sell their policies and there is a tough competition out there in the market for banks. In fact, insurers do offer attractive incentives/bonus to banks to rope in as their corporate agents. The Indian government and LIC, the promoters of IDBI Bank hold 45.48 per cent and 49.24 per cent stakes respectively. As per reports, the Indian government and LIC are planning to dilute their holdings to the extent that a private party can own over 60 per cent of the IDBI Bank's equity. Rao said LIC acquired stakes in IDBI Bank in January 2019 and it is almost three years now during which the bank did not declare any dividends. An equity investment is expected to give a rate of return of 12 per cent per annum. So, the value of IDBI Bank's share should be a minimum of Rs. 90, he said. "At this juncture, if at all, LIC of India wants to sell away its shareholding in IDBI Bank, it should sell at a rate "above Rs. 90/- per share only in order to protect the interest of the policy holders as per the mandate given by IRDAI to LIC of India before acquiring 51 per cent stake in IDBI Bank," Rao added. Any attempt to sell the stake o ...