IndusInd Bank informed on Friday that it had received RBI has granted state-insurer LIC to increase its stake in the private lender from the existing 4.95 per cent to 9.99 per cent.
In a regulatory filing to the Bombay Stock Exchange, the private lender informed the approval is subject to compliance with the Master Direction on 'Prior Approval for Acquisition of Shares or Voting Rights in Private Sector Banks' dated November 19, 2015, Master Direction on 'Ownership in Private Sector Banks' dated May 12, 2016, regulations of the Securities and Exchange Board of India, the Foreign Exchange Management Act, 1999 and any other relevant laws and guidelines.
The private lender informed the approval would be valid for a period of one year, that is, until December 8, 2022.
In November, the apex regulator had accepted recommendations put forth by its working group on corporate ownership of private-sector lenders. This permitted unrestrained promoter shareholding in the initial five years of operation. As per the recommendation, a hike of up to 26 per cent was permitted after 15 years from the existing 15 per cent and the new capital requirements.
This was deemed beneficial for banks like Kotak Mahindra Bank and IndusInd Bank.
At the time of publishing, IndusInd Bank was trading nearly flat at Rs 945.70 on the BSE. On the NSE, the stock was down 0.20 per cent at Rs 944.55.
In an unrelated development, Department of investment and public asset management (DIPAM) secretary Tuhin Kanta Pandey, stated in the previous month, that state-insurer Life Insurance Corporation of India (LIC)'s IPO is expected to take in the fourth quarter of the current fiscal year.
Several media reports have suggested that the state insurer's IPO is expected to rise between Rs 40,000 crore to Rs 1 trillion. The government might allow foreign direct investment in the state insurer to enable a diversified and stronger demand across varied segments of investors.
Several banks are expected to reach out to potential anchor investors for the initial public offering of LIC, next week, says a report of Business Standard. LIC would file its draft prospectus with the markets regulator, SEBI after the embedded value of the company gets finalised.
