The IDBI Bank stock gained more than 16% in two days on reports that insurance behemoth Life Insurance Corporation (LIC) would make an open offer to minority shareholders of the lender in which it proposes to acquire up to 51 per cent equity. LIC already owns 10.82% in IDBI Bank and plans to buy another 41% equity for Rs 9,408 crore.
At 10:51 am, the stock was trading 6.58% or 3.50 points higher at 56.70 on BSE.
On Tuesday, the stock rose 9.02 per cent to close at Rs 53.20 on BSE. Intra-day, it jumped 14.34 per cent to Rs 55.80 on Tuesday when reports about the open offer poured in. On NSE, shares of the company zoomed 9.32 per cent to end at Rs 53.35.
The bank’s market capitalisation rose Rs 1,506 crore to Rs 23,749 crore in trade today. Yesterday, the lender’s market valuation climbed Rs 7,194.93 crore to Rs 22,243.93 crore.
Insurance regulator Irdai has already given its nod to LIC for the stake purchase, a move which will help the debt-ridden bank get a capital support of Rs 10,000-Rs 13,000 crore.
If the deal goes through IDBI Bank, which is grappling with mounting toxic loans with gross non-performing assets rising to a staggering Rs 55,600 crore at the end of latest March quarter, will get much needed capital support to revive its fortune. During the period, the lender’s net loss stood at Rs 5,663 crore.
Life Insurance Corporation sold equities worth Rs 12,000 crore in the past month amid reports that it plans to raise stake in the ailing lender.
The Rs 12,000-crore share sale was aimed at arranging funds for the acquisition of the public sector lender,