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IDBI Bank jumps 10% as board okays insurance JV stake sale, fund raising

The borrowing will be done in one or more tranches, IDBI Bank said in a regulatory filing.

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Last Updated: Apr 09, 2020, 03.44 PM IST
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The private sector lender said that the board of directors approved the proposal to sell bank's stake of up to 27 per cent in its life insurance joint venture IFLI.
NEW DELHI: Shares of IDBI Bank jumped over 10 per cent in Thursday's trade after the bank's board okayed a proposal to sell the bank's stake in life insurance joint venture, in addition to approving a fund raising plan.

The private sector lender said that the board of directors approved the proposal to sell bank's stake of up to 27 per cent in its life insurance joint venture IFLI. They also approved raising funds of up to Rs 7,500 crore through rupee bond in the ongoing financial year.

The borrowing will be done in one or more tranches, IDBI Bank said in a regulatory filing.

The borrowing programme comprises additional Tier I bonds up to Rs 3,000 crore, Basel III Tier 2 bonds up to Rs 3,500 crore and senior/ infrastructure bonds up to Rs 1,000 crore by way of private placement during 2020-21.

IFLI is a three-way joint venture between IDBI Bank (48 per cent as at December 31, 2019), Federal Bank (26 per cent) and Europe's insurance major Ageas (26 per cent).

The shares of the lender closed 7.05 per cent higher at Rs 21.25 on BSE.

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