Life Insurance Corporation of India (LIC) and public sector lender IDBI Bank on Monday denied news reports of merging LIC Housing Finance with the bank.
"This refers to the news item published in the Business Standard of 17 February, 2020 regarding LIC Housing Finance - IDBI Bank merger put on fast track. In this regard we hereby deny the above news item and clarify that no such proposal has been discussed in the Board Meeting of IDBI Bank," IDBI Bank said in a statement to the stock exchanges.
Meanwhile, PTI quoted a separate statement by LIC saying that "there was absolutely no proposal to merge LICHFL with any other entity and all such rumours floating in the market are not based on facts".
Reacting to the news, shares of LIC Housing Finance on the BSE tanked and closed at Rs 379.85 on Monday, down 7.81% from its previous close. Shares of IDBI Bank on BSE closed at Rs 34.5, down 2.54% from its previous close.
The news comes amid the government's proposal to list on the stock exchanges. LIC, India's largest insurer, had a market share of 76.28% in terms of the number of policies sold, and 71% of first-year premium as on 30 November 2019. Its net premium income for FY19 stood at Rs 3.37 trillion, while net income from investments stood at Rs 2.22 trillion.
Interestingly, the government plans to sell its remaining holding in IDBI Bank to private, retail and institutional investors. In January, LIC had completed acquiring a 51% stake in IDBI Bank, after it was approved by the Union cabinet in August 2018.
{{/usCountry}}Interestingly, the government plans to sell its remaining holding in IDBI Bank to private, retail and institutional investors. In January, LIC had completed acquiring a 51% stake in IDBI Bank, after it was approved by the Union cabinet in August 2018.
{{/usCountry}}Mint reported on 14 February that LIC Housing Finance Ltd. has referred 14 real estate projects for last-mile funding through the alternative investment fund (AIF) created to revive stalled housing projects.
The housing finance company's (HFC) management had told analysts on 31 January that there are 260 accounts in the developer loan portfolio and the housing finance company has identified non-performing assets (NPAs). It has also referred five such cases to the National Company Law Tribunal (NCLT). The top 10 developer loans account for roughly 15% of the developer loan book as of the December quarter of FY20. Moreover, of the total bad loans of Rs 5,686 crore, slightly more than Rs 2,000 crore is from project loans and the rest is from the retail segment.