The Reserve Bank of India has approved Life Insurance Corporation of India's (LIC) stake acquisition in ICICI Bank. According to reports from The Economic Times, The Hindu BusinessLine, Live Mint, and latest regulatory filings, the approval allows LIC to acquire an aggregate holding of up to 9.99% of the paid-up share capital or voting rights in the private lender. The central bank's approval was received by ICICI Bank on September 4, 2026, at 9:09 pm on the same day. As per the exchange filing, ICICI Bank received the RBI's approval letter dated September 4, 2026, at 9:09 pm the same day, with the approval valid for one year from the letter date. The approval is subject to certain conditions and LIC will have to comply with relevant statutory and regulatory provisions while carrying out any acquisition under the approval. The acquisition of shares should occur within one year from the date of the RBI approval letter (September 4, 2026); failing which, the RBI approval shall stand cancelled, as stated in ICICI Bank's regulatory filing.
According to the shareholding pattern of ICICI Bank for the April to June 2026 quarter, LIC currently holds 31,18,17,010 ICICI Bank shares, accounting for 4.35% of the private lender's net paid-up capital. As of June 30, 2026, LIC had a 4.35% stake in the bank, and if the insurer acquires a 9.99% stake, its total holding will increase to 14.34%. This represents more than half of the net stake owned by insurance companies in ICICI Bank. By the June 2026 quarter, insurance companies owned 8.24% stake in ICICI Bank, with SBI Life Insurance Company Ltd holding a 1.43% stake. The approval allows LIC to increase its holding to the maximum permissible limit of 9.99% within the one-year validity period. However, the regulatory clearance does not mean that LIC has already acquired the stake, and the approval will lapse if LIC fails to complete the acquisition within the stipulated one-year period.
According to the latest shareholding data available on NSE, LIC held a little over 4% stake in ICICI Bank at the end of the April-June quarter of the ongoing financial year 2027. Among the mutual funds, SBI Mutual Fund owned more than 6% stake, while ICICI Prudential Mutual Fund, Aditya Birla Sun Life Mutual Fund, HDFC Mutual Fund, Kotak Mutual Fund, Nippon Life India Mutual Fund, UTI Mutual Fund, SBI Mutual Fund, and Axis Mutual Fund held 1-6% stake each. SBI Insurance Company meanwhile held over 1% stake. The current approval allows LIC to increase its holding to the maximum permissible limit of 9.99% within the one-year validity period.
Regulations do not allow India's largest life insurer to hold more than a 10% stake in any other bank as it is the promoter of IDBI Bank. As per The Hindu BusinessLine, LIC holds a 49.24% majority stake in IDBI Bank, with the government being the next biggest shareholder with a 45.48% stake in the bank. Among the large banks in which LIC holds stakes are State Bank of India (8.53%), HDFC Bank (4.77%), Axis Bank (7.87%), Punjab National Bank (8.83%), and Bank of Baroda (5.14% through LIC New Pension Plus Secured Fund**). The current approval for ICICI Bank represents a strategic move within these regulatory constraints, allowing LIC to diversify its banking sector investments while maintaining compliance with its IDBI Bank promoter obligations. According to the Insurance Regulatory and Development Authority of India (Irdai), insurers are allowed to acquire up to a 15% stake in a company, depending on the size of the insurer's assets.
On Friday, the LIC share price closed at ₹415.35 on the NSE, according to the latest regulatory disclosure. The stake acquisition comes almost a month after state-owned insurer LIC amassed more than ₹21,000 crore in mark-to-market gains in just 35 days from three software exporters. The market value of LIC's holdings in TCS, Infosys and HCL Technologies climbed to ₹1.26 lakh crore on August 4 from ₹1.05 lakh crore at the end of June, translating into a combined paper gain of ₹21,032 crore. The market value of LIC's holdings in ICICI Bank is expected to increase significantly if the company successfully acquires the approved stake within the one-year period. In the longer term, ICICI Bank shares have delivered positive returns of more than 47% in three years and around 99% in five years, with the company having a market capitalisation of more than ₹10.21 lakh crore.
