SEBI Approves Reclassification of LIC as a Public Shareholder in IDBI Bank.
Banking & Finance
The Securities and Exchange Board of India (SEBI) has approved the request of Life Insurance Corporation of India (LIC) to be reclassified from a promoter shareholder to a public shareholder in Industrial Development Bank of India (IDBI Bank), marking a key step in the bank’s privatization process.
- In August 2025, SEBI gave its nod for the reclassification move, which comes as a pre-condition for the privatization of IDBI Bank. As of June 2025, LIC held a 49% stake in IDBI Bank, making it one of the largest shareholders alongside the Government of India (GoI).
- The reclassification requires LIC to comply with strict SEBI conditions, including voting rights capped at 10%, no direct or indirect control over IDBI Bank, absence of board representation, and a compulsory reduction of its stake to 15% or less within two years.
Main Point :- (i) SEBI has clearly stated that non-compliance by LIC with these conditions will lead to the automatic cancellation of the reclassification status, thereby impacting the ongoing privatization roadmap of IDBI Bank.
(ii) As part of the disinvestment plan, the Government of India and LIC together hold 94.72% stake in IDBI Bank, with GoI holding 45.48% and LIC holding 49.24%. Both stakeholders have agreed to jointly divest 60.7% of their stake through a strategic sale.
(iii) The financial bidding process for IDBI Bank’s privatization is scheduled to take place between October and December 2025, making this SEBI approval a critical milestone in India’s broader banking sector reforms and disinvestment agenda.
About SEBI
Chairperson: Tuhin Kanta Pandey
Headquarter : Mumbai
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