LIC deal may be a game changer for IDBI Bank; capital adequacy to get boost

The results of the deal are visible as IDBI's stock surged about 12 per cent during Friday's trading session with an expected nod from the Irdai to LIC for 51 per cent stake in the bank

Although the IDBI Bank (IDBI)-Life Insurance Corporation of India (LIC) deal may not be a positive one for the insurer, it comes as a breather for the ailing public sector bank. 

The results are already showing. IDBI’s stock surged about 12 per cent during Friday’s trading session with an expected nod from the Insurance Regulatory and Development Authority of India (IRDAI) to LIC for 51 per cent stake in the bank. The green light finally came after market hours. 

What made investors regain confidence in IDBI is capital strengthening. 

IDBI’s mammoth pool of non-performing assets (NPAs) left it in deep