IDBI Bank Ltd. said it plans to divest its stake in insurance joint venture IDBI Federal Life Insurance Company Ltd., Mint reported Sept. 4, citing a newspaper advertisement by the bank.
JPMorgan India Pvt. Ltd was hired to advise and manage a strategic review process for the potential transaction.
The move comes after India's union cabinet approved to inject 93 billion rupees of capital into IDBI Bank.
IDBI Bank's exit in IDBI Federal Life became necessary after state-owned Life Insurance Corp. of India acquired a 51% stake in the lender in January and the bank began using its network to sell LIC products, the report noted.
Following the LIC acquisition, IDBI Bank's board approved in-principle the proposal to reinitiate the divestment process in the insurance joint venture.
IDBI Bank owns a 48% stake in IDBI Federal Life, while Federal Bank Ltd. and Netherlands-based Ageas Insurance International NV each own a 26% stake in the joint venture.
As of Sept. 4, US$1 was equivalent to 71.99 Indian rupees.
