Insurance behemoth LIC has sought the Competition Commission's nod for its acquisition of majority stake in state-owned IDBI Bank.

A listed entity, IDBI Bank is grappling with mounting toxic loans with gross non-performing assets rising to about Rs 578.07 billion at the end of the June quarter. During the three months ended June, the lender's net loss stood at Rs 24.10 billion. The bank has a market capitalisation of over Rs 247.94 billion.

According to a notice submitted by the Life Insurance Corporation of India (LIC) to the CCI: "The proposed combination relates to the acquisition of a controlling stake to the extent of 51 per cent shareholding and management control rights in IDBI through preferential issue and open offer."

Mergers and acquisitions beyond a certain threshold require approval of the Competition Commission of India (CCI).

Earlier this month, IDBI Bank had said that LIC's open offer to purchase shares from the minority shareholders of the state-owned bank will kick-start from December 3.

The open offer, at Rs 61.73 per equity share, will close on December 14.

LIC has offered to acquire 2,04,15,12,929 equity shares, representing 26 per cent of the fully paid-up equity capital of IDBI Bank under the open offer in accordance with Sebi regulations.

The open offer is in connection with the LIC's acquisition of 51 per cent controlling stake in IDBI Bank.

As per Sebi takeover code rules, an acquirer company has to give an open offer to the shareholders of the target company on acquiring shares or voting rights of 25 per cent or more, so that they get an exit route or earn profit by way of selling their equity in the target company.