India Markets closed

IDBI Bank plans to approach LIC for proposed fund raising up to Rs 25 via institutional share sale

New Delhi: Indian public sector lender IDBI Bank plans to approach Life Insurance Corp of India among others for its plan to raise up to Rs 25 billion via issuance of shares to institutional investors by the end of March, the Business Standard reported citing the bank's Deputy Managing Director B K Batra.

"We are on the edge (a floor of tier I capital at 8% preferred by the government) and want to have cushion to manage business growth. We plan to approach LIC and other institutions in current quarter subject to regulatory norms," the daily quoted Batra as saying.

Earlier last week, IDBI Bank had said that it plans to raise up to Rs 25 billion from institutional investors and Rs 5.55 billion via issue of preferential issue of equity shares to the government, which hold 70.52% in the bank.

On January 10, Finance Minister P Chidambaram had said that the government will infuse Rs 125.17 billion into state-run banks by the end of this fiscal 2012-13, to shore up their capital base.

Capital infusion has become important for state-run banks in order to comply with the Reserve Bank of India's strict Basel III norms on capital needs, which will come into force in a phased manner from April 1, 2013.