Life Insurance Corp . of India (LIC), the largest shareholder in National Stock Exchange of India, missed the Securities and Exchange Board of India (Sebi)’s 28 August deadline to divest a 4.9% stake in the stock exchange. The shareholding threshold in NSE was breached when LIC acquired a 51% controlling stake in IDBI Bank. This led to the holding of trading members in NSE breaching the 49% mark under the Stock Exchange and Clearing Corp. (SECC)’s norms. LIC’s holding, of 12.51%, was earlier not considered to be of a trading member. Rather, it was categorized as a strategic investor. IDBI Bank, with less than 1% stake, was always categorized as a trading member. With LIC acquiring control of IDBI Bank the insurance company was reclassified as a trading member. Before the deal, trading members held about 42% in NSE, but with addition of LIC’s 12.5% stake, the trading members now hold 53.89% in the exchange, or 4.89% above the threshold. Sebi had given LIC two deadlines to divest the exc...
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