Ahead of IPO, LIC Chairman clarifies on stake sale in IDBI Bank
Premium- LIC IPO: Chairman MR Kumar said the insurer may not sell its entire stake in IDBI Bank and can use its large network of branches to market its insurance services
Life Insurance Corp. (LIC) Chairman on Monday said the insurer may not sell its entire stake in IDBI Bank and can use its large network of branches to market its insurance services.
"I would personally like to have some stake in IDBI Bank. It has been the strongest contributor to the bancassurance channel for us. This will help us to grow that part of the channel. Therefore, I would like to see that relationship going forward," he said.
Its majority stake in IDBI Bank, which it rescued in 2019, is seen as a risk to its balance sheet.
India's government and LIC hold over 90% stake in IDBI Bank, which had assets of over ₹2.9 lakh crore ($38.91 billion) at the end of December and over 1,800 branches across the country. LIC took over the lender when it was weighed down by bad loans and needed a new infusion of capital.
The government and LIC have been looking at offloading their stake in IDBI for the past few years.
Addressing the media ahead of the launch of IPO, LIC is well-capitalised as of now and that he doesn't not believe the company requires capital at the moment. Going forward, if there is any growth capital requirement, we will approach not only the govt but all the shareholders, he said.
Kumar further added that LIC's potential investors should not worry about government control post the IPO as decisions in the country's largest insurance company are taken by its board and not by the government, which will hold 95% of stake post the IPO.
Speaking on the profitability of LIC, Kumar said, insurance companies metrics or profits are different from others.
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Kumar has also said LIC may not sell its entire stake in IDBI Bank and can use its large network of branches to market its insurance services.
"I would personally like to have some stake in IDBI Bank. It has been the strongest contributor to the bancassurance channel for us. This will help us to grow that part of the channel. Therefore, I would like to see that relationship going forward," he said.
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