NEW DELHI (Reuters) -State-run Life Insurance Corp Of India (LIC), which is planning the country’s largest IPO next month, may not sell its entire stake in IDBI Bank and can use its large network of branches to market its insurance services, its chairman said.
LIC, the country’s biggest insurance company, is planning to float a 5% stake to raise about $8 billion next month, which could make it India’s largest initial public offering (IPO) by far.
Its majority stake in IDBI Bank, which it rescued in 2019, is seen as a risk to its balance sheet.
“I would 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,” said M R Kumar in a press conference with reporters on Monday.
India’s government and LIC hold over 90% stake in IDBI Bank, which had assets of over 2,900 billion rupees ($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.
Kumar also said LIC is well capitalised, and potential investors should not worry about government control post the IPO as decisions are taken by its board and not by the government, which will hold a 95% stake after the flotation.
($1 = 74.5330 Indian rupees)
(Reporting by Nupur Anand and Aftab Ahmed; Editing by Jason Neely and Jan Harvey)