Government kicks off IDBI Bank strategic disinvestment

The transaction will entail the sale of the government’s own 45.48% stake in the bank as well as that of LIC

The government on October 7, 2022 kicked off the process for strategic disinvestment of IDBI Bank with transfer of management control, by issuing a preliminary information memorandum to invite expressions of interest from prospective buyers.

The transaction will entail the sale of the government’s own 45.48% stake in the bank as well as that of LIC, which is its current promoter with a 49.24% stake. Public shareholders hold just 5.28% of the bank’s shares.

The Government of India will sell 30.48% of its stake in the bank, and Life Insurance Corporation of India (LIC) shall sell 30.24%, aggregating to 60.72% of IDBI Bank’s equity share capital, along with transfer of management control in IDBI Bank.

Strategic investors interested in taking over the Bank have been given time till October 28, to submit any queries they have on the preliminary information memorandum issued on Friday and submit expressions of interest by December 16 this year.

Interested parties will only be considered as qualified bidders if they meet the eligibility criteria laid down for the deal, and subsequently secure a clearance as a ‘Fit & Proper’ entity by the Reserve Bank of India and a Security Clearance from the Government of India/Ministry of Home Affairs.

Only qualified bidders will be given the RFP (Request for Proposal) document in the second stage of the transaction, as per the memo published by the Department of Investment and Public Asset Management (DIPAM) in the Finance Ministry. At this stage, they will be provided further details of the Bank’s operations and will be able to place financial bids.