During the process of strategic investor induction process last year, IFCI had converted debentures held by LIC into equity shares to enable the insurance company retain its stake at 8.39 per cent post share allotment to the investor.
However, no strategic investor was inducted as talks with Sterlite-led consortium collapsed. Without induction of an investor, LIC stake has increased to 11.35 per cent. So, LIC has requested the IFCI management to take steps to reduce its stake to 8.39 per cent.
IFCI will reduce paid up capital by about 3 per cent to accommodate LIC's request and convert those shares into debt instruments, sources said.
However, there was no such request from other financial intermediaries, who had also converted debentures into equity during strategic investor induction process.
IFCI had converted debentures into shares at a price of Rs 107 per share. IFCI shares now hover around Rs 38 per share.
