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Shares of ICICI Lombard General Insurance jumped nearly 12 per cent on Monday, a day after the board of private lender ICICI Bank approved raising its stake in the insurance company.
By 10 am, shares of ICICI Lombard were trading 11.74 per cent higher on BSE, at Rs 1229. Meanwhile, the shares of ICICI Bank were up 0.47 per cent on BSE, trading at Rs 955.
ICICI Bank, in a filing with the exchanges, said that it will raise its stake in the general insurance by 4 per cent in multiple transactions. The private lender will acquire at least 2.5 per cent stake out of the four per cent before September 9, 2024.
“The Board of Directors approved an increase in shareholding in the Company, in multiple tranches up to 4.0% additional shareholding, as permissible under applicable law, to ensure compliance with the Section 19(2) of the Banking Regulation Act, 1949 and make the Company, a subsidiary of the Bank, subject to receipt of necessary regulatory approval(s). The Bank would acquire atleast 2.5% stake out of the above 4.0% before September 9, 2024,” the private lender said.
Currently, ICICI Bank owns 48.02 per cent stake in ICICI Lombard, its general insurance arm.
According to the guidelines by the Reserve Bank of India (RBI), banks can either hold less than 30 per cent or more than 50 per cent stake in their general insurance arm.
