Public sector based Central Bank during July 2014 announced its plans to sell 4% of its stake to LIC for Rs. 581 crore. This stake sale is planned to meet banks capital requirement of Rs. 2, 000 crore this fiscal. With this proposed sale Union Govt.s holding in Central Bank would come down to .

BANKING GENERAL KNOWLEDGE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

Public sector based Central Bank during July 2014 announced its plans to sell 4% of its stake to LIC for Rs. 581 crore. This stake sale is planned to meet bank’s capital requirement of Rs. 2, 000 crore this fiscal. With this proposed sale Union Govt.’s holding in Central Bank would come down to .

A	78%
B	80%
C	84%
D	0.88

Explanation:

Detailed explanation-1: -How much stake is LIC selling via IPO? The issue is entirely an offer for sale (OFS) by the government of India, which will offload 22.13 crore equity shares, aggregating to a 3.5 per cent stake of the company.

Detailed explanation-2: -As per the data, strategic sale in LIC through an initial public offering (IPO), the proceeds came in at around ₹20, 516.12 crore—for accounting 65.95% of the disinvestment receipts achieved by the government so far in FY23. LIC IPO is the largest ever in the Indian market.

Detailed explanation-3: -What is the reason behind this sale? Is it for financing the budget deficits? Or is the objective of this IPO to enhance the brand image & provide a public market for the equity shares by listing them on the stock exchange. It is argued that this would also act as a profitable opportunity for retail investors.

Detailed explanation-4: -The government and LIC hold 94.72 per cent stake together in IDBI Bank.

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