The board of directors of Federal Bank on Tuesday gave in-principle nod to acquire additional stake of up to 4% in the equity capital of IDBI Federal Life Insurance Co Ltd (IFLIC) from the IDBI Bank.
Federal Bank currently holds a 26% stake in the insurance company.
The proposed stake purchase is subject to price finalization and all relevant regulatory approvals from the Reserve Bank of India and the insurance sector regulator, Federal Bank said in a regulatory filing, adding that the transaction may take up to six months for completion.
The move follows IDBI Bank’s plans to sell between 23-27% in the life insurance company. IDBI Bank owns a 48% stake in the company while Ageas Insurance owns the remaining 26%.
Shares of Federal Bank closed at ₹43.4 per share, down 5.75% on the BSE, while the benchmark Sensex closed 3.2% lower at 30,636.71 points.
