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Mumbai, Feb 1 () Hours after Finance Minister Nirmala Sitharaman announced plans to sell the government's remaining stake in IDBI Bank, its officers' association said any move to change the services conditions of the employees of the LIC-controlled lender will be opposed.
 Despite being a private sector bank, since LIC took the majority stake in January last year, IDBI Bank employees still enjoy service benefits on par with the rest of public sector banks (PSBs).
 Presenting the Union Budget for 2020-21, the minister said the government will be exiting IDBI Bank by selling its stake to retail and institutional investors through a market offering.
 The government currently holds 47.11 per cent stake in IDBI Bank, while LIC owns 51 per cent.
 The news sent the IDBI Bank stock gaining as much as 17.55 per cent to Rs 39.85 in intra-day trade. It closed the day 10.03 per cent higher at Rs 37.30 on the BSE.
 "As long as our service contract conditions are not changed we do not have any issues with the government move. We will seek a written assurance on this," IDBI Bank Officers Association General Secretary Vithal Koteswara Rao told .
 IDBI Bank was set up as a Development Financial Institution in 1964. Later, it was transformed into a Bank in 2004.
 Though the Reserve Bank re-categorised it as a private sector bank, the Department of Financial Services still lists it as a state-owned bank.
 "We want these service contracts to remain unchanged," Rao said.
 The union said it will also request the government to allow them to switch to other nationalised banks.
 In January 2019, LIC was asked to acquire 51 per cent controlling stake in IDBI bank.
 In the September quarter of 2019-20, IDBI Bank, which is under prompt corrective action (PCA) since May 2017, had received Rs 4,743 crore from LIC, and Rs 4,557 crore from the government.
 The bank had reported a net loss of Rs 3,459 crore in the said quarter, marginally better than Rs 3,602 crore in the year-ago period.
 Last month, the bank met the Reserve Bank to seek lifting of the lending restrictions. HV BEN RUJ

IDBI Bank union wants govt assurance on PSB-type job benefits

New Delhi, Jan 29 () IDBI Bank on Wednesday said it proposes to raise Rs 1,500 crore from bonds to fund growth.
 "The bank has decided to issue Basel III Compliant Tier 2 Bonds for aggregate total issue size of Rs 1,500 crore, with a base size of Rs 500 crore and a green shoe option to retain oversubscription up to Rs 1,000 crore," IDBI Bank said in a filing.
 The bids for the above issuance would be invited on electronic bidding platform (EBP) of BSE Bond and bidding window shall remain open on January 31, it said.
 Last month, Parliament approved Rs 9,300 crore capital infusion in IDBI Bank. 
 The Department of Financial Services got Rs 4,557 crore for infusion into IDBI Bank through recap bonds for its share of 47.11 per cent in IDBI Bank.
 State-owned LIC, which is the promoter of the debt-ridden lender with 51 per cent stake, will pump in an additional Rs 4,743 crore to improve the bank's capital position. DP RVK

IDBI Bank to raise Rs 1,500 cr via bonds

New Delhi, Apr 3 () IDBI Bank on Friday said its board will meet next week to raise rupee bond borrowing limit to Rs 7,500 crore for the current fiscal."The Board Meeting of IDBI Bank Ltd to be held on Wednesday, April 8, 2020 will consider the proposal for approval of Rupee Bond Borrowings limit of Rs 7,500 crore for 2020-21," it said in a regulatory filing.IDBI Bank stock closed at Rs 19.50 on the BSE, up 1 per cent from the previous close. KPM ANUANU

IDBI Bank to consider raising rupee bond borrowing limit to Rs 7,500 cr for FY21

New Delhi, Jun 11 () IDBI Bank on Thursday said its board has approved the appointment of Anshuman Sharma as government nominee director with effect from June 11, 2020. "The Board of Directors has approved the appointment of Anshuman Sharma, Director, Ministry of Finance, Department of Financial Services, as government nominee director on the board of IDBI Bank Limited w.e.f. June 11, 2020 and until further orders," the bank said in a regulatory filing. IDBI Bank is now being categorised as a private sector lender after majority stake acquisition by LIC. In January 2019, the insurance behemoth had completed acquisition of 51 per cent controlling stake in the then public sector IDBI Bank, making it the lender's majority shareholder. Sharma is an IRS officer and has held positions in tax assessment, investigation, administration and transfer pricing. Currently, he is looking after insurance and pension reforms portfolio in the finance ministry. He has served on the board of State Bank of Travancore, Allahabad Bank, IFCI Ltd and India Post Payments Bank (IPPB). He is currently serving on the board of IDFC Ltd. KPM RVK

IDBI Bank's board approves appointment of Anshuman Sharma as govt nominee director

Mumbai, Feb 3 () LIC-owned IDBI Bank on Monday said it has raised Rs 745 crore through issue of Basel III compliant tier 2 bonds which will help improve its capital position.
 The 10-year bond was priced at a coupon rate of 9.50 per cent per annum payable annually, the bank said in a statement.
 "The amount mobilised would be counted as part of tier 2 capital and enhance the capital adequacy of the bank," the statement said.
 The bonds have a call option after five years.
 The bids were opened on electronic bidding platform of BSE on January 31, and allotment to successful bidders closed on Monday.
 In December, Parliament approved Rs 9,300 crore capital infusion in IDBI Bank.
 The Department of Financial Services got Rs 4,557 crore for infusion into the bank through recap bonds for its share of 47.11 per cent in IDBI Bank.
 State-owned LIC, which is the promoter of the debt-ridden lender with 51 per cent stake, will pump in an additional Rs 4,743 crore to improve the bank's capital position.
 Presenting the Union Budget on Saturday, Finance Minister Nirmala Sitharaman said the government's balance holding in IDBI bank will be sold to private retail investors. HV
 RVK

IDBI Bank raises Rs 745 cr through Basel-III bonds

Mumbai, Feb 7 () Life Insurance Corporation is keen to unlock value in IDBI Bank in the run up to the insurance behemoth's IPO, which is likely to happen in FY21, its Chairman M R Kumar said on Friday. Presenting the Budget, Finance Minister Nirmala Sithraman had said the government would sell a part of its 100 percent holding in LIC through an IPO in the next fiscal year. Later, Finance Secretary Rajiv Kumar said the government could divest up to 10 per cent in LIC, which has an enterprise value of Rs 36 lakh crore. The government aims to garner Rs 90,000 crore from the listing of LIC and stake dilution in IDBI Bank in the next fiscal out of the total disinvestment target of Rs 2.10 lakh crore. In January 2019, LIC picked up 51 per cent stake in IDBI Bank, making it the majority shareholder of the lender. The Irdai regulations bar an insurance company from holding more than 15 per cent in any listed entity. However, Irdai has given some exemption to LIC in regard to its holding in IDBI Bank. LIC Chairman Kumar said though Irdai has not fixed any timeline for LIC to reduce its stake in IDBI Bank, the Reserve Bank has given a 12-year timeframe. "We would not want to wait that long, especially when we are also going to be listed, but we have to find some ways to unlock value in IDBI Bank," Kumar told reporters here on Friday. He said once the bank comes out of the lending restrictions imposed by the RBI under the Prompt Corrective Action (PCA) framework and becomes profitable, the bank would be able to attract investors. "Once they come out of the PCA and start lending again, I believe that their profitability will go up substantially and also attract investors," he said. IDBI Bank, which is under PCA framework since May 2017, had met RBI in January to seek lifting of the operational restrictions, had earlier reported. The lender had made a presentation to the RBI on its improved financial position. The government holds 47.11 per cent stake in IDBI Bank, while 51 percent is with LIC. This leaves practically nothing for investors, as its floating shares are only 3 per cent of the paid-up equity. Sitharaman had said the government would want to tap the retail investor segment to sell its stake completely. Kumar said the stake sale by the government in IDBI Bank will help bring in more retail investors. "Once the stake sale happens, people will show more interest in the scrip, because as of now with 51 per cent with us and over 47 (per cent) with the government, there is hardly any free float to give value to shareholders," Kumar said. When asked about the IPO's timing, Kumar refused to give any timeline. "Yes, the finance secretary was on record saying listing will happen in the H2 of FY21. We have to work it out. I don't know how long it takes for the very simple reason that we are doing for the first time," he said. Finance Secretary Rajiv Kumar had on Sunday said the LIC IPO may be done in the second half of FY21. The LIC chairman said the listing would need some legislative changes in the LIC Act. "Basic amendment to the LIC Act would be required," he said. Explaining further, the corporation's appointed actuary Dinesh Pant said, "LIC (Act) has got a Section 24 where the entire fund of the corporation is a controlled fund which is under one fund. So how will be now be bifurcated. There is Section 28 about dividend distribution and so all those things have to be taken care of." He also said it needs to be seen how Section 37,which talks about the sovereign guarantee, is amended. Spelling out the priorities in the run up to listing, he said the focus would be on creating right perception in the market and to work on the process of valuation. He also said the policyholders and employees will not have any impact due to the listing. Earlier this week, nearly 1 lakh employees of the corporation staged an hour-long walkout against the IPO plans. HV BEN ABMABM

Looking to unlock value in IDBI Bank: LIC chief

Listing of <keyword id="6365973" type="COMPANY" weightage="20" keywordseo="life-insurance-corporation">Life Insurance Corporation</keyword> (LIC) and sale of government's stake in IDBI Bank may be delayed beyond March 2021, due to depressed valuation amid COVID-19 pandemic. The government aims to garner Rs 90,000 crore from the listing of LIC and stake dilution in IDBI Bank out of total the disinvestment target of Rs 2.10 lakh crore during the current fiscal. Finance Minister Nirmala Sitharaman while presenting the Budget 2020-21 had announced stake sale in LIC through an initial public offer in the current financial year. <div type="Youtube" id="WYbWln2KsuA" title="Budget 2020: LIC to get Privatised" thumbUrl="https://i.ytimg.com/vi/WYbWln2KsuA/mqdefault.jpg"></div> Given the prevailing market situation, it seems to be difficult to do the LIC stake sale in the current fiscal as the situation is not conducive, sources said. Besides, they said, there will not be a matching appetite for the mega issue of LIC in the present market condition. Due to COVID situation, the government recently for the second time extended the deadline for bidding for privatisation of India's second-biggest oil marketing company Bharat Petroleum Corp Ltd (BPCL) by over a month to July 31. The government currently owns 100 per cent in LIC, while it holds around a 46.5 per cent stake in IDBI Bank. The sources said, the government will have to cut down its expected realisation from stake dilution of both LIC and IDBI Bank even if the market condition improves. So, selling them at low valuation would be an imprudent decision, they added. Besides valuation, the sources said, listing of LIC involves a lot of regulatory clearances and more importantly amendment to the LIC Act itself. Market participants had already termed the listing of insurance behemoth LIC as IPO of the decade akin to the Saudi Aramco listing. The 60-year-old state-owned firm, LIC is the country's largest insurer, controlling more than 70 per cent of the market share. The insurer has a market share of 76.28 per cent in number of policies and 71 per cent in first-year premiums. LIC has many subsidiaries, including IDBI Bank. Turning the corner, IDBI Bank on Saturday posted a profit of Rs 135 crore for the March quarter on account of recoveries from bad loans. The lender reported a profit after 13 straight quarters of net losses. The bank had posted a net loss of Rs 4,918 crore in the corresponding period of last year. In January 2019, LIC completed acquisition of 51 per cent controlling stake in the lender. The state-owned life insurer infused Rs 21,624 crore into the bank. The bank, which is under the Reserve Bank of India's prompt corrective action (PCA) framework, said it has achieved all PCA parameters for exit except return on asset. SEE ALSO: <a href="https://www.businessinsider.in/budget/news/india-moves-to-unlock-value-from-insurance-behemoth-lic-whose-corpus-is-at-31-lakh-crore/articleshow/73836245.cms">The biggest IPO of the next financial year ⁠— LIC, whose corpus is at ₹31 lakh crore</a> <a href="https://www.businessinsider.in/business/news/nirmala-sitharaman-says-the-lic-ipo-will-benefit-retail-investors/articleshow/74008705.cms">Nirmala Sitharaman says the LIC IPO will benefit retail investors</a> <a href="https://www.businessinsider.in/business/news/govt-to-retain-management-control-in-lic-after-listing-sitharaman/articleshow/74459403.cms">Govt to retain management control in LIC after listing: Sitharaman</a>

India's largest-ever IPO may be shelved until next year

New Delhi, Jul 15 () Private lender IDBI Bank will raise up to Rs 11,000 crore equity capital through various modes, including a qualified institutional placement (QIP), in about a year to strengthen its capital base, the bank said on Wednesday. The lender will seek approval from shareholders for the proposal in the upcoming annual general meeting (AGM) on August 17, 2020, the bank said in a regulatory filing. IDBI Bank is required to maintain its Tier I capital in accordance with the relevant regulatory guidelines issued from time to time. In view of ongoing implementation of Basel III norms and consequential capital charge, there is a need to increase the capital to further strengthen the Capital Adequacy Ratio, it said. IDBI Bank said it will seek consent of shareholders in the AGM to offer, issue and allot such number of equity shares of the face value of Rs 10 each and aggregating up to Rs 11,000 crore, in one or more tranches. The issuance of shares will be including but not limited to one or more of the existing shareholders/members, employees of the bank, Qualified Institutional Buyers (QIBs) by way of public issue, rights issue or private placement, it added. The AGM will be held through audio/video means in view of the pandemic, the bank said. "The issue proceeds will enable the Bank to strengthen its Capital Adequacy Requirements as specified by RBI from time to time," it said. The bank said the board will decide the issue price and the date. The allotment of the equity shares will be completed within 12 months from the date of passing of the resolution in respect of a QIP, it added. IDBI Bank shares were trading at Rs 40.30 apiece on BSE, up 2.94 per cent from the previous close. KPM MR

IDBI Bank plans to raise Rs 11,000 cr equity capital

New Delhi, Dec 22 () LIC-controlled IDBI Bank expected to come out of the Prompt Corrective Action (PCA) framework in the last quarter of the current fiscal with the support of capital infusion and recovery from large IBC cases.
According to sources, some of the restrictions with regard to lending by the bank have been eased recently.
With money coming from resolution on Essar Steel and expected flow from resolution of Bhushan Power and Steel and Alok Industries, sources said the bank is likely to be posting profit during the third quarter and the subsequent quarter.
The bank has already come below net NPA threshold of 6 per cent, one of the three parameters for triggering PCA framework. The net NPA of the bank reduced to below 6 per cent in the second quarter ended September 2019.
Recently, Parliament approved Rs 9,300 crore capital infusion in IDBI Bank. The department of financial services got an additional Rs 4,557 crore for infusion into IDBI Bank through recap bonds for their share of 47.11 per cent in IDBI Bank. State-owned LIC, which is the promoter of the debt-ridden lender with 51 per cent stake, will pump in an additional Rs 4,743 crore to improve the bank's capital position.
Wtih this kind of capital infusion coupled with write back from the recoveries from large NPA cases, the bank is expected to come out from the weak bank watch list by the end of the current fiscal, sources said.
The PCA framework kicks in when banks breach any of the three key regulatory trigger points namely capital to risk weighted assets ratio, net non-performing assets (NPA) and return on assets (RoA).
Earlier this month, Finance Minister Nirmala Sitharam said the recapitalisation was done by the government by infusing Rs 21,157 crore into IDBI Bank since 2015 after we came back to power and LIC infused Rs 21,624 crore.
"So both put together have given Rs 42,781 crore to the bank. This has help reduce the net NPAs from a peak of 17.3 per cent in September, 2018 to 5.97 per cent in September, 2019. It has come below RBI's 6 per cent net NPA threshold level," she had said.
Earlier this year, the RBI removed five banks - Bank of India, Bank of Maharashtra, Oriental Bank of Commerce, Allahabad Bank and Corporation Bank - from the PCA framework in two phases after capital support from the government that resulted in improvement in their financial parameters.
The capital infusion helped these lenders meet requisite capital thresholds and reduced their net NPA levels to below 6 per cent. DP MKJ

IDBI Bank likely to be out of PCA framework in fourth quarter

Mumbai, Jun 25 () South-based lender Federal Bank will be paying over Rs 80 crore to buy additional four per cent stake in its life insurance joint venture IDBI Federal Life Insurance, a top official has said. The stake buy from the state-run IDBI Bank will take Federal Bank's stake in the 12-year-old company to 30 per cent, the maximum permissible level for a lender under the regulations, its managing director and chief executive Shyam Srinivasan told . Without giving targeted timelines, he said IDBI Bank, which holds 48 per cent stake in the venture, will be selling 27 per cent stake in the venture to get its holding down to 21 per cent. Federal Bank will be purchasing 4 per cent, while their Dutch partner Ageas Insurance International NV will be buying 23 per cent to take its ownership to 49 per cent, the maximum permissible for a foreign partner in a life insurance venture. "The valuations have been decided between partners by appointing third parties. IDBI Bank will reduce either to 25 or 21 per cent depending on whether we buy or not," he said and added that "we will take our stake to the maximum permissible 30 per cent and it will take about Rs 80-90 crore for the 4 per cent stake." At the lower-end of the valuation hinted by Srinivasan, the total valuation of the insurer will come at about Rs 2,000 crore. Srinivasan said it is a good investment for the bank which can reap in benefits later but declined to answer whether they are looking at an eventual listing of the venture. The company has a good presence in the market and such a deal will be beneficial for all the stakeholders, he said. It can be noted that the transactions have been triggered primarily by life insurance behemoth LIC buying a majority stake in IDBI Bank last year, due to which the lender is reducing its 48 per cent stake in the venture. Srinivasan said the bank is presently in a capital conservation mode wherein it is looking at ways of conserving money, but stressed that increasing the stake is a good bet from a future perspective and also added that the amount to be invested at over Rs 80 crore is "considerably low". AA DRR DRR

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