EXCLUSIVE
Expect IDBI Bank bidders to finish due diligence by March, says fin min source
This story was originally published at 18:26 IST on 22 August 2024
Register to read our real-time news.Informist, Thursday, Aug 22, 2024
By Sagar Sen and Krity Ambey
NEW DELHI – The finance ministry expects prospective investors for IDBI Bank privatisation to complete due diligence by March, a senior official said. The financial records of the bank will be made available to bidders within two weeks.
"The Reserve Bank of India has completed the fit and proper assessment last month, and we will allow investors to evaluate the financial data of the bank now, and we hope that the bidders will complete the analysis in next 3-5 months," the official told Informist.
The official, however, said that this is the first such disinvestment transaction and therefore the timeline may change depending on the market conditions.
The strategic divestment of IDBI Bank is a first-of-its-kind exercise undertaken by the government and the RBI. Though the RBI has categorised IDBI Bank as a private sector bank, the strategic sale is expected to lay down a roadmap for future privatisation of other public sector banks. The government holds a 45.48% stake in IDBI Bank, while Life Insurance Corp of India holds 49.24% in the bank.
Previously, divestment Secretary Tuhin Kanta Pandey had told Informist that the RBI should have expedited the evaluation of prospective investors for IDBI Bank to facilitate the proposed strategic sale.
The Cabinet Committee of Economic Affairs gave an in-principle approval for strategic disinvestment and transfer of management control in IDBI Bank in May 2021. At current prices, the strategic sale of 30.48% stake in IDBI Bank could help the government garner 332.55 bln rupees.
The government has not concluded any strategic sale since the divestment of Air India Ltd in 2022. It called off the divestment of Bharat Petroleum Corp Ltd in 2022 after some potential buyers backed out. Pandey cited volatility in the global energy market as the reason for scrapping the privatisation process for BPCL.
Today, shares of IDBI Bank ended 3.1% higher at 99.75 rupees on the National Stock Exchange. End
Edited by Vidhi Verma
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