No proposal to merge LIC Housing Finance with any other entity, says LIC; shares plunge over 10%

New Delhi: Life Insurance Corporation on Monday said there is no proposal to merge its subsidiary LIC Housing Finance Ltd (LICHFL) with any other entity. The statement came after some reports suggested that insurance behemoth LIC might expedite the process of merging LICHFL with its banking arm IDBI Bank. “There was absolutely no proposal to merge LICHFL with any other entity and all such rumours floating in the market are not based on facts,” LIC said in a clarification.

LIC Board discussed the future of LIC Housing, IDBI in the last board meet, sources close to LIC Board tell @YashJain88 pic.twitter.com/F7W42ISVsd

— CNBC-TV18 (@CNBCTV18Live) February 17, 2020

IDBI Bank in a separate filing clarified that no such proposal has been discussed in its board meeting. Shares of the LICHFL tanked more than 10 percent in day trade on BSE after the reports. The scrip settled down by 7.71 percent at Rs 380.30. IDBI shares also declined by 2.54 percent to end at 34.50. IDBI Bank, in which LIC holds 51 percent stake, had reported widening of its standalone net loss to Rs 5,763.04 crore due to higher bad loans. The lender had posted a net loss of Rs 4,185.48 crore during the corresponding October-December period of the previous fiscal year. The bank witnessed high proportion of bad loans, with gross non-performing assets (NPAs) at 28.72 percent of the gross advances at end of December 2019, little lower than 29.67 percent in the corresponding period of the previous fiscal.