LIC sells 2% stake in Axis Bank, reduces equity to 10.2%

State-owned LIC has sold 2 per cent equity of over 5.25 crore shares of Axis Bank through an open market transaction. After the sale of these shares, the stake of LIC (Life Insurance Corporation of India) in the private sector bank has now come down to 10.2 per cent from 12.21 per cent according to BSE filling by Axis Bank. LIC has sold 5,25,06,202 shares through an open market transaction, the filing said without disclosing the total sale value.

1. The total sale value could not be ascertained as the insurer sold the shares over a period of time.

2. The bank's shares closed at Rs 762.85 per share on BSE, down by 1.18 per cent.

3. LIC is country’s largest insurer and institutional investor that holds equity stakes in several banks like Axis Bank, Corporation Bank, ICICI Bank, State Bank of India and Punjab National Bank among others. 

4. However, according to investment rules of the Insurance Regulatory and Development Authority of India (IRDAI), an insurance company cannot hold more than 15 per cent equity stake in one single firm. The rule was made to prevent concentration risks and spread the corpus across the companies on offer.

5. LIC was given a special dispensation by IRDAI for investing in IDBI Bank - investing over 15%.