LIC will invest equity capital worth about Rs 2,334.70 crore in its subsidiary company LIC Housing Finance by taking additional stake in the company.
The company will seek shareholders’ nod for the preference issue to LIC in its extraordinary general meeting next month on July 19.
Mode of issue
The board of directors of the company in its meeting last week had approved preferential shares up to 4,54,00,000 through a private placement to LIC.
The issue price of the equity share of the face value of Rs 2 each shall be Rs 514.25 apiece, which is the price calculated as per Sebi regulations, 2018.
With an additional 4.93 percent stake, LIC’s shareholding in the housing financier post the allotment of shares will go up to 45.24 percent from over 40.31 percent currently.
The company on June 15 reported a 5 percent decline in its profit after tax to Rs 398.92 crore in the quarter ended in March 2021 due to higher provisioning for bad loans.
It had reported a profit after tax of Rs 421.43 crore in the year-ago period.
Impact on stock price
LIC Housing Finance share price added 2 percent in the morning session on June 25 after the announcement.
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