Shares of LIC Housing Finance in NSE -9.94 % cracked 12 per cent in Monday’s early trade after reports that the country’s biggest institutional investor Life Insurance Corporation of India (LIC) may speed up the process of merging its housing finance arm with IDBI Bank.

LIC Housing Finance shares traded 12 per cent down at Rs 362.60, while the benchmark BSE Sensex was up 13 points, or 0.03 per cent, up at 41,244 at around 9.50 am (IST). IDBI Bank was up 1.41 per cent up at Rs 35.90.

At present, the market capitalisation of LIC Housing Finance and IDBI Bank is hovering at Rs 18,700 crore and Rs 37,214 crore. LIC holds 51 per cent stake in IDBI Bank and 40.13 per cent in LIC Housing Finance, according to BSE.

 “LIC’s stake in the merged entity would stand at 47 per cent- assuming a one-for-one swap ratio” a Business Standard report stated.

A one-time tax hit of Rs 6,273 crore has left IDBI Bank deep into the red for the 13th consecutive quarter with a net loss of Rs 5,763 crore for the three months to December 2019. The bank had posted a net loss of Rs 4,185 crore in the year-ago period.

IDBI Bank has been under the prompt corrective action (PCA) framework of the Reserve Bank of India since May 2017.

Source: economictimes