Bank of India rose 1.03% to Rs 97.70 at 14:00 IST on BSE after the bank upon change in law has sold 18% stake in Star Union Dai-lchi Life Insurance Company Ltd to Dai-ichi Life Insurance Company Limited.
The announcement was made during market hours today, 21 June 2016.Meanwhile, the S&P BSE Sensex was down 54.40 points or 0.25% at 26,798.93.
On BSE, so far 6.47 lakh shares were traded in the counter as against average daily volume of 6.43 lakh shares in the past one quarter. The stock hit high of Rs 98 and low of Rs 96.50 so far during the day. The stock had hit a 52-week high of Rs 187.75 on 17 August 2015. The stock had hit a 52-week low of Rs 78.60 on 25 May 2016. The stock had outperformed the market over the past one month till 20 June 2016, gaining 19.02% compared with 6.19% gains in the Sensex. The scrip had, however, underperformed the market in past one quarter, rising 0.1% as against Sensex's 7.67% gains.
The mid-cap state-run bank has equity capital of Rs 934.03 crore. Face value per share is Rs 10.
Bank of India said that upon change in law, the bank has sold its 18% stake in Star Union Dai-lchi Life Insurance Company Ltd (SUD) to Dai-ichi Life Insurance Company Limited (DILIC). The shareholding of DILIC will rise to 44% from 26% in SUD upon completion of the transaction after receiving necessary statutory/regulatory approvals. Shareholding of Bank of India will be reduced to 30% from 48%. Union Bank of India will continue to hold 26%.
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SUD was incorporated in the year 2007 as a joint venture company among Bank of India, Union Bank of India and DILIC to undertake life insurance business in India, The business of the joint venture has been increasing steadily with support of all the partners of the joint venture.
In terms of the joint venture agreement, DILIC had an option to purchase 18% additional stake in SUD upon Change in Law permitting overseas investors to hold stake higher than 26%. DILIC has since exercised the call option to acquire the stake from Bank of India and increased shareholding will be 44% from 26% upon completion of the transaction.
This move by DILIC to raise the stake comes after the new insurance rules allow foreign partners in insurance companies in India to increase their stake to 49%. Earlier, they were allowed to hold up to 26% stake in Indian insurance companies. However, the act dictates that all Indian insurers must have full Indian management and control.
Bank of India reported a net loss of Rs 3587.09 crore in Q4 March 2016, higher than net loss of Rs 56.14 crore in Q4 March 2015. The bank's total income fell 7.3% to Rs 11384.91 crore in Q4 March 2016 over Q4 March 2015.
The Government of India held 70.33% stake in Bank of India (as per the shareholding pattern as on 4 May 2016).
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