This comes as a part of the plan to offload government shareholding to move towards privatisation.
IDBI Bank has allotted 15.8 crore equity shares, equivalent to 7.16% stake, on preferential basis to LIC of India, which now holds over 14% stake in the state-run lender.
The allotment of shares is part of IDBI Bank's plan to offload government shareholding as part of privatisation move.
In the Budget speech, Finance Minister Arun Jaitley said that the process of transformation of IDBI Bank has started.
"Government will take it forward and also consider the option of reducing its stake" to below 50%, he said.
IDBI Bank in a regulatory filing said that the preferential allotment of 15,87,61,801 shares, equivalent to 7.16% stake, to LIC happened on March 23, 2016, Earlier, LIC held 7.21% stake (137,017,058 shares) in the bank.
Post acquisition, the stake of the LIC in IDBI Bank goes up to 14.37% or 295,778,859 shares.
Government at present holds 72% stake in the bank, down from more than 80% earlier.
Meanwhile, a section of IDBI Bank employees today went on a four-day strike to protest the government's move to privatise the bank.
They have demanded that the government should give an assurance in writing that the public shareholding in the bank will not go below 51%.
Earlier this month, IDBI Bank chief Kishor Kharat had said that international institutions like CDC of England and GIC of Singapore have shown some interest in buying stake in the bank.
Besides, there were media reports that the government was in talks with the International Finance Corporation (IFC), a World Bank Group member, to sell up to 15% up stake in the struggling infra lender-turned commercial bank.
In the December quarter, the bank had reported its worst numbers with a net loss of Rs 2,183 crore on a massive rise in NPAs, making it the second largest loss in the history of the nations banking history after BoBs over Rs 3,342 crore in the same period.
At 0937 hours, IDBI Bank's shares were at Rs 69.45 a piece, up Rs 1.20 or 1.76% from previous day's close.
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