Life Insurance Corporation of India (LIC), which is planning the country’s biggest IPO next month, may not sell its entire stake in IDBI Bank and use its large network of branches to market its insurance services , said its president.
Country’s largest insurer LIC is planning to hold a 5 per cent stake next month to raise around $8 billion, which could make it India’s biggest ever initial public offering (IPO).
Its majority stake in IDBI Bank, which it had saved in 2019, is seen as a risk to its balance sheet.
MR Kumar said in a press conference with reporters on Monday, “I would like to have some stake in IDBI Bank. It has been the strongest contributor to the Bancassurance channel for us. This will help us grow that part of the channel.” “
The Indian government and LIC hold over 90% stake in IDBI Bank, which had assets of over Rs 2,900 billion ($38.91 billion) at the end of December and has over 1,800 branches across the country. LIC took over the lender when it was weighed down by bad loans and needed fresh inflow of capital.
The government and LIC have been contemplating selling their stake in IDBI for the past few years.
Kumar also said that LIC is well capitalized, and potential investors should not worry about government control after the IPO as the decisions are taken by its board and not by the government, which after flotation is 95% Will share.