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Insurance behemoth Life Insurance Corporation (LIC) will make an open offer to minority shareholders of IDBI Bank in which it proposes to acquire up to 51 percent equity, source said. The state-owned
life insurer will approach market regulator Sebi after getting approval from its board for acquiring stake in the state-owned bank Insurance regulator Irdai has already given its approval 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. "The LIC-IDBI Bank deal will trigger an open offer to protect
the interest of minority shareholders in the bank," sources said. As per SEBI takeover code rules, an acquirer has to give an open offer to the shareholders of target company on
acquiring shares or voting rights of 25 percent or more. According to sources, the board of Insurance Regulatory and Development Authority of India (Irdai), at its meeting held in Hyderabad last
month, had permitted LIC to increase its stake from 10.82 percent to 51 percent in IDBI Bank. As per current regulations, an insurance company cannot own more than 15 percent in
any listed financial firms. LIC has been looking to enter the banking space by acquiring a majority stake in IDBI Bank as the deal is expected to provide business synergies despite
the lender's stressed balance sheet. For LIC it will get about 2,000 branches through which it can sell its products while the bank would get massive funds of LIC. The bank
would also get accounts of about 22 crore policy holders and subsequent flow of fund. 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
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