SEBI Approves LIC's Public Shareholder Status For IDBI Bank - Check Key Details

In a significant update linked to IDBI Bank's shareholding structure, the Securities and Exchange Board of India (SEBI) has approved reclassification of the Life Insurance Corporation of India (LIC) as a public shareholder, as per an exchange filing.

After the centre's recent disinvestment in the lender, this update marks a pertinent step in bank's transition.

According to the market regulator's directions, LIC’s voting rights in IDBI Bank will be capped at 10 per cent of total net effective voting rights.

India's top insurance provider will neither exercise any control over the bank's operations. It will not have any special rights linked to IDBI Bank or have representation on the board of directors, it said.

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LIC’s wants reclassification of its residual stake will be outlined in the letter of offer to shareholders in connection with the open offer made by the new acquirer pursuant to the strategic disinvestment of the bank.  

Notably, LIC is required to have a stake below 15 per cent within two years from the closing date of the strategic disinvestment transaction.

With SEBI’s approval, IDBI Bank will now approach stock exchanges for the formal reclassification. The development is viewed as a significant milestone in the bank’s privatization journey, aligning its shareholding structure with regulatory norms.