LIC Reclassified As Public Shareholder In IDBI Bank, Clears Way For Strategic Stake Sale By Govt

Mumbai: Life Insurance Corporation (LIC) has received approval from SEBI to be reclassified as a public shareholder in IDBI Bank. LIC informed stock exchanges about this on Sunday, August 24. This approval now clears the way for a strategic stake sale in the bank.

LIC Was a Promoter Till Now

LIC was given promoter status in 2019 when it took control of IDBI Bank. As a promoter, LIC had a board seat and played a strategic role in the bank’s operations. But now, with the new status, LIC will only be a financial investor and not take part in the bank’s management.

SEBI’s Approval Comes with Conditions

SEBI has given this reclassification with a few conditions:

- LIC will have no control over the bank.

- LIC will have no board representation.

- LIC’s voting rights will be limited to 10 percent.

LIC must reduce its shareholding to 15 percent or less within the next 2 years (currently it holds over 45 percent).

Government Plans to Sell 60 percent Stake

The Government of India and LIC together hold 60.7 percent stake in IDBI Bank (Govt – 45.48 percent, LIC – 49.24 percent). Both plan to sell 60 percent of their combined stake.

This strategic disinvestment was first announced in 2022, and now the process is moving forward.

The government has completed due diligence and plans to invite financial bids between October and December.

Potential buyers include:

- Emirates NBD (Dubai)

- Prem Watsa, a Canadian billionaire

According to DIPAM Secretary Aruneesh Chawla, the aim is to complete the sale within this financial year.

IDBI Bank Share Price Update

On Friday, IDBI Bank shares closed at ₹94.90, down 2.75 percent. In the past one month, the stock has fallen by 1.91 percent, but in 2025 so far, it has risen by about 25 percent. The bank’s market cap is ₹1.02 lakh crore.