Sebi clears LIC’s reclassification as public shareholder in IDBI Bank amid divestment plan

IDBI Bank said that capital markets regulator Sebi has approved the reclassification of Life Insurance Corporation (LIC) as a “public shareholder” in the lender once the government’s strategic disinvestment process is completed.

In an exchange filing, the bank stated that Sebi approval is subject to multiple conditions, including LIC capping its voting rights at 10%, not exercising any control over the bank’s affairs, and not enjoying any special rights, either formally or informally.

LIC will also not be represented on IDBI Bank’s board nor act as a key managerial person.

The regulator has further directed that LIC must bring down its residual stake in IDBI Bank to 15% or below within two years of the completion of the disinvestment, as per Reserve Bank of India guidelines.

The reclassification will also require IDBI Bank to make the necessary applications to stock exchanges once the transaction closes.

Sebi has clarified that any breach of the conditions will automatically nullify the reclassification approval.

The move is part of the strategic disinvestment plan for IDBI Bank, approved by the Cabinet Committee on Economic Affairs in May 2021, under which the government and LIC are jointly offloading their stakes.

In the recent first quarter, IDBI Bank reported 17% year-on-year (YoY) growth in its standalone net profit at Rs 2,007 crore, compared with Rs 1,719 crore posted in the year-ago period.

The lender posted a net interest income (NII) of Rs 3,166 crore in Q1 FY26, which was 2% lower.

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