edited by: Mohammad Haris
Last Update: January 07, 2023, 17:55 IST
The government currently holds 45.48 per cent stake in IDBI Bank, while LIC holds a controlling 49.24 per cent stake in the lender.
Center is looking to disinvest 30.48 per cent stake, while Life Insurance Corporation of India will disinvest 30.24 per cent in IDBI Bank
DIPAM secretary Tuhin Kanta Pandey said on Saturday that the government has received several bids for majority stake IDBI Bank, then he said this deadline Closed earlier in the day for expressions of interest.
The Center is considering selling 30.48 per cent stake in the bank and 30.24 per cent stake in Life Insurance Corporation (LIC). The government currently holds 45.48 per cent stake in IDBI Bank, while LIC holds a controlling 49.24 per cent stake in the lender.
“Several interest has been received for strategic disinvestment of Government and LIC’s stake in IDBI Bank. The transaction will now move to the second phase,” Pandey said in a tweet.
Multiple Expressions of Interest received for strategic disinvestment of Government and LIC stake in IDBI Bank. The transaction will now move to the second phase. pic.twitter.com/dloieEQC9i— Secretary, DIPAM (@SecyDIPAM) January 7, 2023
The government had invited bids for IDBI Bank’s EOI on October 7 with a deadline of December 16. The last date was later extended till January 7.
Recently, markets regulator SEBI allowed the government’s stake in IDBI Bank to be reclassified as “public” on the condition that its voting rights will not exceed 15 per cent. The reclassification of the government’s remaining 15 per cent stake in IDBI as “public” will make it easier for the new buyer to meet the mandatory minimum public shareholding norm of 25 per cent.
Sebi said the government’s intention to reclassify its stake as “public” should be specified in the offer document when the open offer is made by the new acquirer of the lender.
In 2019, the state-owned life insurance company infused Rs 21,624 crore into the bank. LIC is currently the promoter of IDBI Bank with management control and the government is the co-promoter.
IDBI Bank was reclassified as an associate company on December 19, 2020 due to reduction of LIC’s shareholding to 49.24 per cent following issuance of additional equity shares by the bank under qualified institutional placement.
In the Union Budget 2021, the Center had announced a target of Rs 1.75 lakh crore in FY22 from stake sale in public sector companies and financial institutions, including two PSU banks and an insurance company.
Subsequently, in May 2021, the Union Cabinet gave its approval for strategic disinvestment and transfer of management control in IDBI Bank.
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