State-run lender IFCI is buying IDBI Bank Ltd’s entire 18.95 per cent equity stake in custodial and depository services provider Stock Holding Corp of India Ltd (SHCIL), according to a stock market disclosure. The value of the transaction, however, is not disclosed.
Following the stake acquisition, IFCI’s equity participation in SHCIL will increase to 52.86 per cent from 33.91 per cent, it added.
IDBI Bank obtained approval from its shareholders for the proposed stake sale on February 28.
“SHCIL is in the process of obtaining no objection certificates from the promoter members of SHCIL for the above purchase of equity shares. The purchase of shares would also be subject to obtaining statutory approvals and completion of other formalities required for effecting the transaction,” IFCI said on Friday.
The government and RBI had reportedly directed the state-run lenders to offload their non-core holdings in an effort to boost and protect their capital base.
In 2012, SHCIL, then a subsidiary of the IDBI Bank, was proposed to be merged with its parent. However, the deal was not executed.
SHCIL counts among its shareholders various public sector financial institutions, including IFCI, SU-UTI, LIC and GIC, besides IDBI.
Established in 1986, SHCIL is promoted by IDBI and six other public financial & investment institutions of the country. The company provides custodial services to financial intermediaries (mutual funds, FIIs), depository services to retail investors, as well as e-stamping, FD and bond distribution, mutual fund products, GOI Bonds and loan products, PF fund accounting, SGL constituent account services, etc., to institutional investors, banks, mutual funds and retail investors.
(Edited by Joby Puthuparampil Johnson)