IDBI Bank stock rallies 5% on reports LIC may acquire significant minority stake

IDBI Bank share price rallied more than 5 percent intraday on Friday after reports suggest that state-run insurance major LIC is in discussion with the government to pick up stake in the bank.

Sources told CNBC-TV18 that LIC is open to buy significant minority stake in IDBI Bank but there was no discussion of taking controlling stake yet.

As per its investment strategy, LIC does not buy controlling stake in companies.

Investment decision will go through LIC Investment & Strategy Committee and the quantum of stake buy will depend on negotiations & decision by the committee, sources said.

CNBC-TV18 further learnt that the discussion related to IDBI Bank stake Buy from government has not reached to the LIC board yet.

The insurance company will present the discussion for IDBI stake buy to board if okayed by the Investment & Strategy Committee.

Life Insurance Corporation of India (LIC) currently holds 10.82 percent equity stake in the bank as per shareholding data available on the exchanges. The government holding stood at 80.96 percent.

In the Union Budget 2016, the government had first announced that it would bring its stake in IDBI Bank below 50 percent.

Meanwhile, the government appointed B Sriram (MD, SBI) as the MD & CEO of IDBI Bank for three months.