In a letter to its employees, IL&FS had claimed that if funds worth Rs 16,000 crore stuck with concession authorities were released on time, it would not have landed in this mess.
The board of directors have approved the proposal for seeking shareholders' approval through postal ballot for the preferential issue of equity capital to Life Insurance Corporation of India (LIC) aggregating up to 14.90 per cent of the bank's post issue paid up capital, IDBI Bank said in a filing to stock exchanges.
Earlier this month, the Union Cabinet had approved LIC's proposed acquisition of up to 51 per cent stake in debt-ridden IDBI Bank.
LIC already has 7-7.5 per cent stake in the bank and will acquire the remaining for majority holding.
According to a BSE filing, the lender received LIC's proposal to acquire the controlling stake, as a "promoter through preferential allotment of shares or open offer" on Monday.
Insurance regulator IRDAI has already given its approval to the insurer for the stake purchase.
Sources added that if the deal goes through, the IDBI Bank would get a capital support of Rs 10,000-Rs 13,000 crore.
If the LIC becomes a major stakeholder in IDBI Bank, it could be beneficial for both state-owned financial players in the long run.
The media reports also said the government had sought the views of insurance regulator IRDAI and markets watchdog Sebi on the move. IRDAI does not allow LIC or any other insurer to own more than 15 per cent in any company.
Life Insurance Corporation of India (LIC) on Tuesday announced the launch of a cancer cover as a health insurance policy with sum assured ranging from Rs 10 lakh to Rs 50 lakh.
Arun Jaitley last week said that there were multiple options before the government for recap bonds and they are being examined and the best ones would be explored.
As per the regulatory norms, an insurance firm is restricted from holding more than 15 per cent of shares in any listed firm.
LIC, which manages Rs 25 trillion of assets, has divided its investment portfolio among the three managing directors so that a more balanced decision can be taken.
The government has replaced SK Roy as chairman of state-owned Life Insurance Corporation of India with Managing Director VK Sharma. Roy resigned in June, nearly two years ahead of his retirement.
Government will soon start the selection process of new LIC chairman following the premature exit of the incumbent, S K Roy, and complete the whole exercise by the next month.
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