The share price of IDBI Bank rallied over 14 percent on Thursday after the Cabinet gave in-principle approval for strategic disinvestment along with transfer of management control in the lender.

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The Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi approved the strategic sale of IDBI Bank, an official statement said on Wednesday.

The extent of respective shareholding to be divested by the central government and LIC shall be decided at the time of structuring of transaction in consultation with the RBI, it said.

The central government and LIC together own more than 94 percent equity of IDBI Bank. LIC, currently the promoter of IDBI Bank with management control, has a 49.21 percent stake.

In the Union Budget 2021-22, Finance Minister Nirmala Sitharaman had announced the privatisation of public sector banks (PSBs) as part of a disinvestment plan to garner Rs 1.75 lakh crore.

"Other than IDBI Bank, we propose to take up the privatisation of two Public Sector Banks and one General Insurance company in the year 2021-22," she had said.

At 10:25 am, the shares of IDBI Bank were trading 6.85 percent higher at Rs 40.55 apiece on the BSE.

-with PTI inputs

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First Published:May 6, 2021 11:05 AM IST