The transaction would be concluded subject to regulatory approvals, the lender said.
As of March 31, 2022, LIC-controlled IDBI Bank holds 25 per cent stake in the AFLI.
IDBI Bank said that the transaction is expected to be completed in the second quarter of the current fiscal year 2022-23, subject to regulatory approvals and satisfaction of the terms and conditions set out in the agreement.
IDBI Bank is expected to receive up to Rs 580.20 crore from sale of 25 per cent stake in AFLI to Ageas, the bank added.
AFLI is a three-party joint-venture between IDBI Bank,
and Ageas Insurance International NV, which is one of Europe’s largest insurance companies.
Ageas concentrates its activities in Europe and Asia, which together make up the major part of the global insurance market.
Private sector insurer AFLI posted a net profit of Rs 94 crore in the fiscal ended March 2022, clocking profit for the 10th consecutive year beginning FY13.
With the stake buyout from IDBI Bank, AFLI will become the first company in the life insurance sector where the foreign partner will raise its stake to the maximum permissible limit of 74 per cent.
Ageas raised its stake in the JV from 26 per cent to 49 per cent after buying 23 per cent stake from IDBI Bank in December 2020. Federal Bank holds 26 per cent in AFLI. The life insurance company began its operations in 2008 and reported its first profit in the first year of operations itself.
Stock of IDBI Bank traded at Rs 36.65 apiece on BSE, up by 1.10 per cent from previous close.