Last Update: January 06, 2023, 11:32 AM IST
There will be no representation of the government on the board of IDBI Bank.
Shares of IDBI Bank were up 5 per cent at Rs 57.25 on the BSE in Friday’s intra-day trades in an otherwise weak market.
Shares of IDBI Bank were up 5 per cent at Rs 57.25 in Friday’s intra-day trades on the BSE after SEBI allowed the central government to classify it as “public” following its stake sale otherwise in the market subject to its voting. have rights. Not more than 15 per cent of the total voting rights of the bank, the lender said in a regulatory filing on Thursday.
Currently, the government and state-owned Life Insurance Corporation hold a little over 94 per cent stake in IDBI Bank and are classified as its co-promoters. While the government holds 45.48 per cent stake, LIC holds around 49.24 per cent, and the remaining 5.28 per cent is public shareholding.
Further, the government should specify its intention to reclassify its stake in the bank as a “public holding” in the letter of offer sent to the shareholders of the bank in respect of the open offer made by the acquirer.
Further, post disinvestment, the bank will have to make an application to the stock exchanges for reclassification of the government holding under the public category. And, the new acquirer must ensure compliance with the minimum public shareholding (MPS) requirements within one year of the sale.
The central government is considering selling about 61 per cent stake in IDBI Bank. The last date for submission of Expression of Interest for IDBI Bank is Saturday. Once the government receives the preliminary bids from the buyers expressing interest, the Reserve Bank of India (RBI) will examine them to see if they meet the central bank’s “fit and proper” criteria.
The government had earlier allowed foreign funds and investment vehicles incorporated outside India to own more than 51 per cent of IDBI Bank. The Center has also said that it may consider relaxing the five-year lock-in period for shares if the non-banking financial company or NBFC is merged with IDBI Bank.
Also, the norms applicable to public sector banks will not apply to IDBI Bank after the government and LIC sell their stake, even though they together will continue to hold around 33 per cent in the bank.
The government has also said that IDBI Bank will continue to function as a private sector bank even if it is acquired by a foreign bank.
The Department of Investment and Public Asset Management (DIPAM) had last month extended the deadline for submission of Expression of Interest (EoI) for the strategic disinvestment of the bank from December 16, 2022, to January 7, 2023.
Interested bidders, who had submitted physical copies of EOI electronically, had extended the last date from December 23 to January 14.
In the past three months, IDBI Bank’s share price has gained nearly 35 per cent compared to a 4 per cent rise in the S&P BSE Sensex. It has rallied 85 per cent in the last six months as against 14 per cent gain in the benchmark index.
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