IDBI Bank privatization: After discussions with RBI, the government may invite EoI by the end of July

IDBI Bank Privatization: Central government is considering IDBI Bank Privatization For some time now, and has kept the lender on its list of companies for disinvestment. The Department of Investment and Public Asset Management (DIPAM) is currently conducting a roadshow in the US for the sale of the bank, which will mark another important milestone in reaching India’s disinvestment goals. The Center had said earlier in April that the actual quantum of government stake sale in IDBI Bank would be known after the roadshow is over.

Currently, the government is in the process of holding a roadshow in the US, an official was quoted as saying by PTI, on Friday, June 10. Once more such investors are found, it will finalize its modalities IDBI Bank stake sale, the official said.

“We may need another round of discussions with RBI on IDBI strategic sale. Expression of Interest (EoI) may be invited by the end of July,” the official said. Earlier sources had confirmed that the government may invite EoI in May to sell its stake in IDBI Bank and is expected to complete the disinvestment process in the current financial year 2022-23.

The official said though the quantum of stake dilution of both the government and LIC is yet to be decided, management control in IDBI Bank will be transferred to the strategic sale.

DIPAM secretary Tuhin Kanta Pandey had also said in April that the EoI would be invited after the meeting with investors is over. “The quantum of exit will be ascertained after the roadshow and then the structure of expression of interest will be finalised. One thing is certain that the control of the management will come. At present it is with LIC. But, at what level of equity the management control will have to be decided when we have finalized the structure of the EOI,” Pandey had said during an event on LIC in Delhi. IPO road show.

The government holds 45.48 per cent stake in the bank, while LIC holds 49.24 per cent. Necessary amendments to the IDBI Bank Act have already been made through the Finance Act 2021, and transaction advisors have been appointed.

The Cabinet Committee on Economic Affairs had in May last year given in-principle approval for strategic disinvestment and transfer of management control in IDBI Bank. “CCEA has given in-principle approval for strategic disinvestment with transfer of management control in IDBI Bank Ltd,” the government said in a statement.

In January 2019, IDBI Bank became a subsidiary of LIC, following the acquisition of an additional 8,27,590,885 equity shares. In December 2020, IDBI Bank was classified as an associate company due to the reduction of LIC’s stake to 49.24 per cent. IDBI Bank’s privatization efforts come at a time when the government has shelved similar plans for Bharat Petroleum.

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