The government is expecting to get financial bids for IDBI Bank's strategic sale by September, DIPAM Secretary Tuhin Kanta Pandey said.
Several global and domestic institutions have expressed interest in buying about 61 per cent of the government and Life Insurance Corporation's (LIC) stake in IDBI Bank and had put in preliminary bids, the last date of which was January 7.
Overall, we are looking at financial bids at least before second half (October-March) of next fiscal year, Pandey told PTI in an interview.
The Department of Investment and Public Asset Management (DIPAM), which manages government holding in state-owned enterprises, had in October invited bids for selling 30.48 per cent stake in IDBI Bank, along with 30.24 per cent stake of LIC.
The government and LIC together hold 94.72 per cent stake in IDBI Bank, which will come down to 34 per cent after the strategic sale.
Talking about the way forward in the strategic sale, Pandey said the work on two set of clearances security clearance from government and Fit and Proper clearance from the RBI would go on parallelly.
Once it (security clearance and Fit and Proper clearance) is cleared we qualify them ( bidders). Then we take them to the virtual data room on signing of non-disclosure undertaking. Then they can do due diligence and draft agreements will be shared, Pandey said.
The respective agencies will have intensive work before the bidders can be qualified for the second round, the Secretary said, without disclosing the timeline for the clearances.
The investors who have put in EoI (expression of interest) have already submitted required information to secure the clearances and those details would be forwarded to the RBI and respective government agencies.
The transaction is expected to get over in the second half of next fiscal year beginning April 2023.
Pursuant to the transaction, the government will own a 15 per cent stake and LIC 19 per cent in IDBI Bank, taking their total holding to 34 per cent.
The government had last year asked Sebi to treat its residual stake in IDBI Bank as a financial investment since it would not exercise any control over the bank and will have no board seat.
Reclassification of the government's remaining 15 per cent stake in IDBI Bank as 'public' will make it easier for the buyer of IDBI Bank to meet the mandatory 25 per cent minimum public shareholding norm. Currently, public shareholding in IDBI Bank is 5.28 per cent.
Earlier, DIPAM had said the potential buyers should have a minimum net worth of Rs 22,500 crore and must have reported a net profit in three out of the last five years to qualify to bid for the bank.
In addition, a maximum of four members would be permitted in a consortium. Also, the successful bidder would be required to mandatorily lock in at least 40 per cent of the equity capital for five years from the date of acquisition.
Shares of IDBI Bank were trading at Rs 55.70 apiece, down 0.45 per cent from the previous close on BSE.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
You’ve hit your limit of {{free_limit}} free articles this month.
Subscribe now for unlimited access.
Already subscribed? Log in
Subscribe to read the full story →
Quarterly Starter
₹900
3 Months
₹300/Month
Smart Essential
₹2,700
1 Year
₹225/Month
Super Saver
₹3,900
2 Years
₹162/Month
Renews automatically, cancel anytime
Here’s what’s included in our digital subscription plans
Access to Exclusive Premium Stories Online
Over 30 behind the paywall stories daily, handpicked by our editors for subscribers


Complimentary Access to The New York Times
News, Games, Cooking, Audio, Wirecutter & The Athletic
Business Standard Epaper
Digital replica of our daily newspaper — with options to read, save, and share


Curated Newsletters
Insights on markets, finance, politics, tech, and more delivered to your inbox
Market Analysis & Investment Insights
In-depth market analysis & insights with access to The Smart Investor


Archives
Repository of articles and publications dating back to 1997
Ad-free Reading
Uninterrupted reading experience with no advertisements


Seamless Access Across All Devices
Access Business Standard across devices — mobile, tablet, or PC, via web or app