Only 22 per cent of the minority shareholders of IDBI Bank exercised their option of exiting the company in the open offer floated by Life Insurance Corporation (LIC), which is taking majority stake in the debt ridden state-owned bank, sources said.
Bulk of the minority shareholders, however, continue to hold the shares of IDBI Bank indicating their faith in the new management, they said.
Existing shareholders feel value of their shares going up substantially in the future following management takeover by LIC, the sources added.
The open offer for 2,04,15,12,929 shares was made last month at a price of Rs 61.73 a share.
LIC had already increased its holding beyond 44 per cent before the open option.
In August, the Cabinet approved the acquisition of controlling stake by LIC as a promoter in the bank through combination of preferential allotment and open offer of equity.
LIC has been looking to enter the banking space by acquiring a majority stake in IDBI Bank, as the deal is expected to provide business synergies despite the lender's stressed balance sheet.
With the culmination of the deal, LIC will get about 2,000 branches through which it can sell its products, while the bank would get massive funds of LIC.
The bank would also get accounts of about 22 crore policy holders and subsequent flow of fund.
IDBI Bank would get huge amount of low-cost deposits of the policy holder and it can also cross-sale products of LIC. The bancassurance would generate good amount of cash, which according to experts would push them out of red.
The bank had reported a net loss to Rs 3,602.49 crore during the September quarter of 2018-19.
Its gross non-performing assets hit 31.78 per cent (Rs 60,875.49 crore) of the gross advances by September 30, 2018, as compared with 24.98 per cent (Rs 51,367.69 crore) in the year-ago period.