LIC recently announced that it is planning to infuse over Rs. 2,334 crores worth of equity capital in LIC Housing Finance. The announcement added over 2% growth in the subsidiary’s shares price on 25th June.
LIC Housing Finance will raise the equity capital by picking up additional stakes within LIC to reach the target price of Rs. 2,334 crores. LIC Housing Finance plans to issue shares at a nominal price of 524.24 Rs. to LIC, and they will be issued on a “preference basis.”
LIC Housing Financing conducted a meeting the previous week where the executives approved preference shares worth 4,54,000 via private placement. With a nominal issuing price of Rs. 2 for every share, which will be 514.25 Rs. The price is calculated according to the Securities and Exchange Board of India (SEBI). Back on 24th June, LIC Housing Finance stated the regulatory filing.
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Once the shares are allotted, LIC’s shareholdings within the housing financier will grow from 40.31% to 45.24%. LIC shareholders have already provided their consent to the development back on 19th June.
Back on 15th June, LIC reported that they faced a 5% reduction in its profit after taxes in 2021’s first quarter. The amount reached 398.92 crores, and LIC stated the reason behind the loss to be bad loan provisioning. However, the company reported that the profit after taxes was 421.43 crores in the same period a year ago. For the 2020-2021 financial year, their net income surged by 14%, reaching 2,734.34 crores, which was only 2,401.84 crores in 2020.
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LIC HFL recently announced acquiring Rs. 2,334 crores worth of equity capital from LIC. LIC will pay the amount through preference shares worth 514.25 Rs. one piece. With LIC’s net profit already rising, the recent development is expected to increase its reach even more.
