IDBI-Federal Life Insurance is considering all options including a public listing to help the largest shareholder IDBI Bank reduce or sell off its 48% stake in the private sector life insurer, Federal Bank CEO and board member of the insurance company Shyam Srinivasan said.
“IDBI will no longer be there (in the company) or will they remain an investor or a distributor, which is unclear,” Srinivasan said in an interview. “It is their choice. They can still retain a 10% investment. Their intention is to reduce stake. Listing is also an option. A conversation has reopened and it will all be clear in the next three months.”
Federal along with Belgium-based insurance company Ageas hold 26% in the company. In January, LIC completed its acquisition of IDBI Bank and regulations do not allow a bank to own two insurancecompanies or vice versa. In a release on Sunday, IDBI said it will leverage business synergies with its now owner LIC through its collective network of branches, offices and workforce by selling LIC policies and management of premium receipts of LIC through its branches. The bank’s board has approved the appointment of LIC as a corporate agent.
Srinivasan said the bank is open to either remaining as a shareholder or selling stake if a buyer emerges. “There is value in the company. We are doing very well with IDBI Federal, this year, it will grow at 40% over the previous year. In the last three quarters, we have done more than we did in the 12 months of the previous year in distribution and assets under management, so that momentum is strong and will continue,” Srinivasan said.
Source:- The Economic Times
Date:- 13th March,2019