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This article is more than 3 year old.

Here's how the IDBI Bank-LIC deal unfolded

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The deal will help inject capital between Rs 10,000-13,000 crore in IDBI Bank. 

Here's how the IDBI Bank-LIC deal unfolded
Life Insurance Corporation of India (LIC) on Monday approved the acquisition of a 51% stake in the debt-laden IDBI Bank, through preferential shares.
The deal requires approvals from market regulator Securities and Exchange Board of India (Sebi), Reserve Bank of India (RBI) and the government.
The due diligence process by LIC is complete as per the directions of Insurance Regulatory and Development Authority of India (IRDAI), the insurance firm had said.
Here's how the events unfolded:
On June 29th, the Insurance Regulatory and Development Authority of India (IRDAI) approved LIC's proposal to invest up to 51% in IDBI Bank. IRDAI said, the insurance company's proposal is for an investment in the bank and not to acquire it.
The regulatory body added that LIC's investment will be subjected to a time-bound exit. The bank agreed to sell LIC products post the deal.
On July 16th, LIC approved the proposal for the same. The insurance comapny said it would acquire an additional 43%  stake in the bank via preferential allotment.
According to a government official, LIC said, it may nominate four directors on the IDBI Bank board.
On the following day, June 17th, in the IDBI Bank's board of director's meet, the bank said that it will approve the proposal from LIC and may discuss broad turnaround and restructuring plan.
"What Now?"
The government may seek exemption under the Banking Regulation Act to permit LIC to acquire a stake of over 10% in IDBI Bank. As per current regulations, an insurance company cannot own more than 15% in any listed financial firms.
The government may seek open offer exemption under the Substantial Acquisition of Shares and Takeovers regulation of Sebi and also for minimum public shareholding clause of 25%.
A cabinet note, including the approvals from RBI, Sebi and IRDAI is to be submitted to the Prime Minister's Office for the final approval. The note will include finer details of the deal transaction.
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