Central government and LIC to disinvest 60.72% stake in IDBI Bank
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New Delhi, Oct 08: The central government and the Life Insurance Corporation (LIC) are set to shrug off 60.72 percent of their stake in IDBI Bank.
With this decision, the central government would inch closer to its divestment target of Rs 65,000 crore for FY23.
In May, the government had already accumulated close to Rs 24,450 by listing India's bigger insurer, the LIC. Currently, the government and the LIC jointly have around 94 percent stake in IDBI Bank. While the center has a 45.48 percent stake, the LIC held nearly half of the ownership with 49.24 percent till June 30. According to the details, the center would offload 30.48% of its stake, and the LIC to dilute its stake by 30.24 percent. This would reportedly be the first privatization of a public sector bank. "Expression of Interest is invited for Strategic Disinvestment of specified GoI and LIC stakes in IDBI Bank along with transfer of management control," tweeted Secretary, DIPAM. The government has invited an expression of interest (EoIs) till December 16. Expression of interest means a willingness of a potential buyer to participate in a bid to buy a certain stake in a company. The EoIs would be valid for six months and can be extended to a further six months. Banks, foreign lenders, shadow banks, alternate investment funds, and offshore funds have been allowed to place bids. However, large industrial and corporate houses and individuals are not eligible to bid, reported Reuters.
Bids can be submitted by single entities or as part of a consortium. As of June, IDBI Bank had a net profit of Rs 7.5 billion against Rs 6 billion last year.