The Securities and Exchange Board of India (Sebi) cleared the reclassification, said the Department of Investment and Public Asset Management (DIPAM) in a letter dated August 23, according to a stock exchange notification.
LIC had purchased a 51% stake in IDBI Bank in January 2019, making it the bank’s majority shareholder and promoter at a time when the lender was under stress. The government later approved the strategic disinvestment of IDBI Bank in May 2021, paving the way for the joint sale of stakes held by the Centre and LIC to private investors.
Under Sebi’s approval, LIC’s voting rights will be capped at 10% and it cannot exercise direct or indirect control over the bank. Sebi has asked LIC to reduce its residual stake to 15% within two years in line with RBI guidelines.
