Department of Investment and Public Asset Management Secretary Tuhin Kanta Pandey said financial bids for IDBI Bank will be called only after due diligence and the minimum timeline for this is set to 3-4 months. The Secretary is also hopeful of completing divestment of companies already announced by the centre.
January 09, 2023 / 06:15 PM IST
Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey, in an exclusive interview with CNBC-TV18, said as per transaction advisers, IDBI Bank stake sale received a good response not just from domestic institutions, but foreign institutions participated in the Expressions of Interest (EoIs) as well.
He said that the document of qualified bids would be submitted to RBI. As per Pandey, financial bids for IDBI Bank would be called only after due diligence, the minimum timeline for which is set to three-four months. On January 7, Pandey tweeted: “Multiple EoIs were received for the strategic disinvestment of government’s and LIC’s stakes in IDBI Bank. The transaction will now move to the second stage.”
Laying out the importance of competitive bidding, Pandey batted for the market to decide the exact price for any deal. “Asset quality should not be an issue in IDBI divestment,” he said.
With respect to the holding of the Union government and LIC in the bank, he said both would eventually want to make an exit. The government and Life Insurance Corporation (LIC) hold 94.71 percent stake in the bank, and the successful bidder will have to make an open offer to acquire a 5.28 percent stake from public shareholders.
Pandey said that IDBI Bank enjoys a Minimum Public shareholding (MPS) exemption till 2024. Centre had earlier this month, before the deadline of EoI for IDBI Bank, tweaked regulations to exempt listed companies in which the government and public sector undertakings (PSUs) together or individually hold a majority stake from the minimum public shareholding (MPS) norm. He also said that PEs could bid in a consortium, which is not mandatory.
The DIPAM secretary is also hopeful of completing the divestment of companies already announced by the centre. Pandey said that the Shipping Corporation of India (SCI) demerger notice is awaited but denied having any information about divestment in fertiliser companies. “There is nothing as far as Metals & Minerals Trading Corporation (MMTC) is concerned. As per transaction advisers, we are moving forward with BEML.”
Earlier this month, the Ministry of Corporate Affairs (MCA) granted permission to a plan to split the core and non-core assets of SCI that will pave the way for the government to divest its 63 percent stake in the company.