The Indian government and state-owned Life Insurance Corp of India (LIC) strategic stake sale in IDBI Bank is set to move to the second stage. DIPAM secretary on Saturday said the government received multiple expressions of interest (EoI) for the divestment of IDBI Bank. Both government and LIC are looking to offload 60.72% together in the Mumbai-headquartered lender.
Department of Investment and Public Asset Management (DIPAM) secretary Tuhin Kanta Pandey in an official tweet said, “Multiple Expressions of Interest received for the Strategic Disinvestment of Govt and LIC Stake in IDBI Bank.”
The secretary further added, “The transaction will now move to the second stage.”
DIPAM invited expression of interest (EOI) for the strategic disinvestment of stake aggregating to 60.72% in IDBI Bank by the Indian government and LIC along with the transfer of management control. The late date for submission of EOI was revised to January 7, 2023, from earlier December 16, 2022. The last date for the submission of physical copies of EOI is revised to January 14th.
Notably, to enable new investors to meet the minimum public shareholding norm, earlier this week, market regulator Sebi allowed the government to reclassify its shareholding in IDBI Bank as ‘public’ ahead of the due date for EOI submission.
Furthermore, on Monday, amidst the open offer, the Finance Ministry announced extending an exemption to the new buyer of the bank which will enable them to maintain a 25% minimum public shareholding in IDBI Bank.
On Friday, IDBI Bank shares closed at ₹59.05 apiece up by 7.85% on BSE. Its market cap is around ₹63,492.93 crore.
The Centre had intimated that “there may not be any impact on the primary dealer business of the IDBI Bank.”
Under the strategic disinvestment, the government plans to sell a 30.48% stake and the largest insurer in the country, LIC to offload 30.24% shareholding in IDBI Bank — aggregating the total stake sale to 60.72%.
As of March 31, 2022, LIC is the largest shareholder in IDBI Bank holding to the tune of 529.41 crore equity shares or 49.24%. While the government held 488.99 crore equity shares or 45.48% in IDBI Bank.
The divestment is divided into two sequential stages. In the first stage, expression of interest (EOI) is invited, and after a ‘Fit and Proper’ assessment check by RBI, and security clearance by GoI/MHA the bidders who are selected will be notified as the Qualified Interested Parties (“QIPs”). The second stage is where QIPs will be provided with Request for Proposal document (“RFP”) and further details of IDBI Bank and soliciting financial bids on terms detailed under the RFP.
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