Govt extends deadline for transaction, legal advisors till July 22 to bid for managing sale of IDBI Bank
The government has extended till July 22 the deadline for transaction and legal advisors to submit a bid to manage the strategic sale of IDBI Bank. The Department of Investment and Public Asset Management (DIPAM) had invited bids from merchant bankers and law firms on June 22. To manage the sales process and provide legal advice. The last date for bidding was July 13.
“… the competent authority has decided to extend the date of submission of bids by… nine days. The last date for submission of bids will now be July 22, 2021,” DIPAM said in a notice.
DIPAM, which manages the government’s equity, had also clarified to merchant bankers that LIC’s stake in IDBI Bank would be sold along with the government’s stake, but the exact quantum of stake dilution would be decided later.
The central government and LIC hold more than 94 per cent equity in IDBI Bank.
LIC, which currently has management control, holds 49.24 per cent stake, while the government holds 45.48 per cent stake in the bank. The non-promoter stake is 5.29 per cent.
The cabinet in May had approved the strategic sale of the entire stake of the government and Life Insurance Corporation (LIC) in IDBI Bank.
In response to queries received from prospective transaction advisors in IDBI Bank, DIPAM clarified that since LIC’s stake will be sold along with the government’s stake, a single transaction advisor will manage the entire share sale process.
“The mandate received from CCEA is to offload 100 per cent stake of the Government of India and LIC with transfer of management control. However, the exact quantum is yet to be worked out. This will be determined, as we go through the transaction and the investors To ascertain the interest and appetite of the market.
“It is clarified that LIC’s stake will be sold along with the Government of India’s stake in this transaction. Hence there is only one transaction advisory,” it said.
It added that the quantum of stake dilution would be declared before the RFP (Request for Proposal) stage of the transaction.
Finance Minister Nirmala Sitharaman had said in her budget for 2021-22 that the process of privatization of IDBI Bank would be completed in the current financial year. The government has set a target of raising Rs 1.75 lakh crore from minority stake sale and privatization in the current financial year.
Of the Rs 1.75 lakh crore, Rs 1 lakh crore is to come from the sale of government stake in public sector banks and financial institutions. 75,000 crore will come as CPSE disinvestment proceeds.
Read also:LIC’s stake in IDBI Bank to be sold with government: DIPAM
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