Shares of ICICI Lombard General Insurance Company Limited (NSEI:ICICIGI) rallied 11% in early trade as ICICI Bank Limited (NSEI:ICICIBANK) board clears plan to raise stake in ICICI Lombard by 4%. At 9:37 am the ICICI Lombard stock was up 11.92% at INR 1,220 on NSE. The ICICI Bank board has approved raising its stake in ICICI Lombard General Insurance by 4% in multiple transactions, according to an exchange filing on May 28.

The bank owns 48.02% of the general insurance arm. ICICI Bank plans to acquire at least 2.5% of the 4% by September 9, 2024. In insurance ventures, banks can hold either less than 30% or more than 50% in accordance with the Reserve Bank of India guidelines.

ICICI Bank, the country's second-largest private sector lender, had earlier sought to reduce its stake in the general insurer to below 30%. The bank had requested a delay in diluting the stake until September 9, 2024, and the regulator granted the request.