Life Insurance Coporations' (LIC), which has been reportedly planning to make a foray into the banking sector, has hiked its stake in the Chennai-based public sector lender Indian Overseas Bank (IOB) to close to 12%.
LIC has bought additional shares of IOB from the open market in different tranches. The Insurance Regulatory & Development Authority (Irda) had capped the life insurer's exposure to a single company at 10% level sometime back. Though LIC had subsequently sought a review, Irda has not yet relaxed the norms.
The insurance behemoth has bought close to 2% stake through market purchase. Post transaction, LIC’s share in IOB went up to 11.97% from 9.96%. The insurance major bought 1,08,41,158 shares and the tansaction was executed on BSE and NSE platforms. In a regulatory filing with exchanges, IOB informed that LIC now holds 6,52,02,526 shares (11.97%) in IOB. Prior to transaction LIC was holding 5,42,61, 368 shares in the bank. The government holds 61.23% in the bank, while Citigroup Global Markets Mauritius Pvt Ltd has 1.59% equity shares, apart from LIC. The total public shareholding in the bank has been at 38.77%. IOB stocks closed at Rs 88 on NSE on Thursday
In 2009, IOB took over Pune-based Shree Suvarna Sahakari Bank, which was founded in 1969. Way back in 2001, it had acquired Mumbai-based Adarsha Janata Sahakari Bank. In the quarter ended December 2009, IOB posted a 73.7% drop in its net profit at Rs 101.70 crore as compared to Rs 388.44 crore in the same quarter last fiscal.
Courtesy: Financial Express 19.3.2010