IDBI Bank’s EoI for sale by September
The Department of investment and public assessment management (DIPAM) has started inviting legal advisors for strategic and legal disinvestment of IDBI Bank.
After the selection of one of these advisors, the department would invite expression of interests (EOIs) for the purchase of stakes in the offer. According to a senior officer, the stakes would likely be by September.
An official added that “Once these advisers are added, the department will promptly invite the expressions of interests for the purchase of the stakes in the offer and this would likely be by September”.
According to the official plan, the government will exit the bank by divesting it is 45.48% stale which is worth about Rs 19,000 Crores, and the promoter Life Insurance Corporation will offer to sell a 39.34% stake with an interest to relinquish management control.
The government has diluted its stake in IDBI bank but it was a failed attempt. Because the absence of meaningful investor interest resulted in the government ultimately having to sell its majority stake in the Industrial Development Bank of India to LIC.
After 5 years, Industrial Development Bank of India had a comeback with a net profit of Rs 1,359 crore for FY21. The bank’s improvement is reflected in its share price. IDBI Bank’s share price has risen to 46%.
As per Rs 1.75 Lakh crore disinvestment target for FY22, the government has already budgeted Rs 1 Lakh crore from the disinvestment of government stake in public sector financial institution like LIC and IDBI Bank strategic sale.