google adsense check
Home STOCKS IDBI Bank share price: IDBI Bank hits fresh new 52-week high on...

IDBI Bank share price: IDBI Bank hits fresh new 52-week high on approving stake sale in insurance arm

NEW DELHI: Shares of IDBI Bank climbed 5 per cent in Monday’s trade soon after the bank board accepted sale of additional than fifty percent of the bank’s 48 for every cent stake in IDBI Federal Life Insurance for Rs 595 crore.
In a regulatory filing, IDBI Bank mentioned it will promote 23 per cent stake to Ageas Insurance Worldwide N.V and 4 per cent to Federal Bank, the existing joint venture partners.
After the deal, the Belgian insurer Ageas stake in IFLI will raise to 49 for each cent, though Federal Bank’s stake would go up to 30 per cent.
Following the announcement, the stock strike an higher circuit limit of 5 per cent at Rs 41.75 on BSE. This was also a new 52-7 days high for the inventory.
Write-up stake sale, IDBI Bank will personal 21 per cent stake in the life insurance business.
The Rs 595 crore lifted by this transaction values the existence insurer at about Rs 2,200 crore, which is just a slight premium to the firm’s book value.
Subsequent LIC’s acquisition of 51 for every cent stake in IDBI Bank, the stake sale experienced become imperative as insurance rules do not allow an insurance business to individual a considerable stake in a rival insurer.
An insurer is not authorized to hold much more than 10 per cent stake in a rival insurer. Considering that LIC owns 51 per cent stake in IDBI Bank and the latter owns 48 for each cent stake in IDBI Federal Life Insurance Enterprise, the bank has to divest its stake in its insurance joint undertaking.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Most Popular

Recent Comments