Stock of the bank slumped 3.17 per cent to Rs 56.50 on the BSE. Intra-day, it went down to touch a low of Rs 56.20.
On the NSE, the shares slipped 3.09 per cent to end at Rs 56.40. During the trading session, the scrip touched a low of Rs 56.05.
"The deal, conceptualised in June 2018, is envisaged as a win-win situation for both IDBI Bank and LIC with an opportunity to create enormous value for shareholders, customers & employees of both entities through mutual synergies," IDBI Bank said in a BSE filing.
In August last year, the Cabinet approved the acquisition of controlling stake by Life Insurance Corporation (LIC) as a promoter in the bank through a combination of preferential allotment and open offer of equity.
IDBI Bank has about 1.5 crore retail customers and about 18,000 employees. With this deal, LIC will have a strategic investment in a large bancassurance channel, thereby increasing its productivity and reducing distribution costs.
Besides, the bank has decided to continue with the existing top management, including Rakesh Sharma as the managing director of the bank.
The bank's board also approved the appointment of Rajesh Kandwal as an additional director and LIC's nominee director on the board of IDBI Bank.
Kandwal is the director and the chief executive officer of LICHFL Care Homes Ltd.