IDBI Bank puts MF, insurance units on the block; shares rise 4%

NEW DELHI: Shares of IDBI Bank rose 4 per cent on Monday morning as the lender has put on the block its insurance and mutual fund businesses as it seeks to increase the capital base after Life Insurance Corporation acquired over 51 per cent stake in the bank.

The scrip closed at Rs 44.90, up 3.46 per cent on BSE while the benchmark BSE Sensex closed 1.04 per cent higher at 37,054.10.

"The bank has taken several steps as part of the strategic alliance to create a ‘one-of-its-kind’ financial conglomerate in the Indian banking space with LIC as its majority shareholder," said IDBI Bank in a ET report.

“By September 30, we plan to sell the IDBI Federal Life Insurance Company,” said Rakesh Sharma, CEO, IDBI Bank. “We have appointed JP Morgan as investment banker. Our promoter is LIC and we want to monetise our non-core assets.”

Meanwhile, the shares of IDBI Bank opened at Rs 44 on BSE against its previous closing of Rs 43.40.