Daijiworld Media Network – New Delhi

New Delhi, Aug 24: In a major step towards IDBI Bank’s privatization, the Securities and Exchange Board of India (SEBI) has approved the reclassification of the Life Insurance Corporation of India (LIC) as a public shareholder, the bank informed stock exchanges.

As per SEBI’s directions, LIC’s voting rights will be capped at 10% of the total net effective voting rights. The insurer will not exercise control over the bank’s affairs, nor enjoy any special rights or board representation, the filing clarified.

LIC’s intent to reclassify its residual stake will be reflected in the letter of offer to shareholders, linked to the open offer made by the new acquirer under the government’s strategic disinvestment plan. Further, LIC is required to trim its holding to 15% within two years of the transaction closure.

Following SEBI’s nod, IDBI Bank will now approach stock exchanges for formal reclassification. The move is seen as a significant milestone in aligning the lender’s shareholding with regulatory norms.

Earlier, Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla told NDTV Profit that due diligence for the bank’s stake sale is underway, and bids are expected to be invited in the third quarter of this fiscal.