LIC-controlled IDBI Financial institution on Thursday stated it has bought 23 per cent stake in life insurance coverage enterprise to international partnerAgeas for Rs 507 crore.
With this transaction, the stake of the Belgian companion inIDBI Federal Life Insurance coverage Co Ltd (IFLI)hasrisen to 49 per cent, the higher international direct funding restrict prescribed by the regulation.
IDBI Financial institution accomplished sale transaction of its 23 per cent stake to Ageas Insurance coverage Worldwide on December 31, 2020 pursuant to receipt of the requisite regulatory approvals, the financial institution stated in a regulatory submitting.
“Pursuant to sale of 23 per centholding representing 18,40,00,000 shares to Ageas for a consideration of Rs.507.10 crore, IDBI Financial institution’sshareholding in IFLI now stands at 25 per cent from the sooner 48 per cent,” it stated.
Following this transaction, thejoint enterprise has been rebranded as Ageas Federal Life Insurance coverage Firm Ltd, it added.
In addition to, the financial institution intends to promote 4 per cent stake to a different companion Federal Financial institution.
The board at its assembly held on June 26, 2020, had accredited promoting IDBI Financial institution’s stake in IFLI to the extent of 23 per cent to Ageas and 4 per cent to Federal Financial institution at a mixed worth of about Rs 595 crore, topic to all regulatory approvals.
The Rs 595 crore raised via this transaction values the life insurer at round Rs 2,200 crore which is only a slight premium to the corporate’s guide worth.
Submit Life Insurance coverage Company India (LIC) buying 51 per cent stake in IDBI Financial institution, the stake sale had develop into crucial as insurance coverage legal guidelines don’t permit an insurer to personal a big stake in a rival insurer.
An insurer just isn’t allowed to carry greater than 10 per cent stake in a rival insurer. Since LIC owns 51 per cent stake in IDBI Financial institution and the later owns 48 per cent stake in IFLI, the financial institution needed to divest its stake in its insurance coverage three way partnership.
(Solely the headline and film of this report might have been reworked by the Enterprise Customary workers; the remainder of the content material is auto-generated from a syndicated feed.)
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