Shares of ICICI Lombard shot up over 11% on Monday after ICICI Bank said it would raise its stake in the general insurer, making it a subsidiary of the country’s second-largest bank.
What Happened? ICICI Bank said in an exchange filing that it would raise its 48.02% stake in ICICI Lombard by up to 4% via multiple transactions. It aims to acquire at least 2.5% of the 4% stake increase before September 9, 2024.
As per the Reserve Bank of India (RBI) guidelines, banks can own either less than 30% or more than 50% of insurance ventures.
ICICI Bank had initially sought to bring down its stake in the general insurer to below 30%. The bank had asked for an extension to delay the stake dilution until September 9, 2024, which the regulator approved.
Price Action: Shares of ICICI Lombard rocketed up nearly 12% to ₹1,231.60 in early trade on Monday, while ICICI Bank’s stock was up 0.5% to ₹955.35.
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