IDBI Asset Management Company (AMC) is all set to merge its assets with Life Insurance Corporation of India (LIC) AMC. The talks are in the final stages and a decision will be taken ahead of the mega initial public offering (IPO) of LIC, said people in the know.
Following LIC’s acquisition of IDBI Bank, the former has become a sponsor of two AMCs, which is not allowed under the mutual fund regulations of the Securities and Exchange Board of India (Sebi). This issue may have acted as a roadblock for getting regulatory clearance for the LIC IPO.
“This merger of course is necessitated due to LIC’s holding in both LIC AMC and IDBI AMC, which breaches the cross-holding norms. IDBI AMC would likely be taken over by LIC AMC given the latter’s size and parentage,” said a senior official of IDBI AMC.
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