LIC Rebuffs Merger of LIC Housing Finance with Other Entity

New Delhi: The Life Insurance of India (LIC) on Monday clarified that it has no plan to merge its subsidiary LIC Housing Finance Ltd (LICHFL) with another entity.

The statement came after reports suggested that the insurance behemoth might expedite the process of merging LICHFL with its banking arm the Industrial Development Bank of India (IDBI).

"There was absolutely no proposal to merge LICHFL with any other entity and all such rumours floating in the market are not based on facts," LIC said in a clarification.

IDBI Bank in a separate filing clarified that no such proposal has been discussed in its board meeting.

On Monday, shares of the LICHFL tanked more than 10 per cent in day trade on BSE after the reports. The scrip settled down by 7.71 per cent at Rs 380.30. IDBI shares also declined by 2.54 per cent to end at 34.50.

IDBI Bank, in which LIC holds 51 per cent stake, had reported widening of its standalone net loss to Rs 5,763.04 crore due to higher bad loans.

The lender had posted a net loss of Rs 4,185.48 crore during the corresponding October-December period of the previous fiscal year.

The bank witnessed high proportion of bad loans, with gross non-performing assets (NPAs) at 28.72 per cent of the gross advances at end of December 2019, little lower than 29.67 per cent in the corresponding period of the previous fiscal.