IDFC Ltd, which has got an in-principle approval from the RBI to float a bank, has decided to come out with a follow-on public offer/ preferential offer so as to bring down foreign shareholding in the company below 50 per cent.

Its board of directors today nominated Rajiv B Lall as Executive Vice-Chairman of the banking company as and when it is formed.

In a communication to the stock exchanges, IDFC said its board had accorded in-principle approval to raise funds from the domestic market through a follow-on public offer/ preferential offer with a view to bring down the foreign shareholding in the company below 50 per cent.

According to shareholding data available on the company Web site, the stake of FII/FDI/NRI in the company’s equity was 53.69 per cent at the end of March 31, 2014. The Government of India holds 17.24 per cent stake in the equity, followed by retail & HUF investors 9.73 per cent, Indian FIs/insurance co/ banks 8.75 per cent, bodies corporate 7.06 per cent, MFs 2.72 per cent and clearing members & trusts 0.78 per cent.

However, no specific timeline has been mentioned for equity dilution by foreign investors. The company’s equity base was Rs 1,516.29 crore as at the close of March 31, 2014.

The board also decided to nominate Dr Rajiv B Lall as Executive Vice-Chairman of the banking company, as and when it is formed, subject to the approval of the board of directors and the shareholders of the proposed bank and the RBI.

The stock witnessed huge trading volume of 1.19 crore shares minutes before the market was to close, though the share price was up by just Rs 5.20 to Rs 136.10.

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