The Government of India has confirmed that the divestment of IDBI Bank is proceeding according to the defined strategic sale process. The Industrial Development Bank of India is a public sector bank created in 1964 to promote industry and commerce. It was later renamed IDBI Bank after it became a commercial bank.
In January 2023, the government and the Life Insurance Corporation of India (LIC) received multiple expressions of interest (EoIs) for the sale of about 61% stake in IDBI Bank. The Department of Investment and Public Asset Management (DIPAM) has clarified that the transaction is still on track in the post-EoI stage after receiving multiple EoIs.
The government and LIC hold a 94.72% stake in the bank, which will come down to 34% after the strategic sale. The Centre, which owns 45.48 per cent, is looking to divest 30.48 per cent in the lender, while state-owned LIC, which holds 49.24 per cent, will offload a 30.24 stake in the lender.
The government and the Reserve Bank of India are currently vetting the bids received. According to officials, the transaction is expected to conclude in the second half of FY24, beginning April 2023.
The Centre has cleared the air after news reports suggested that the government may defer the $4 billion privatisation plan for IDBI Bank owing to unprecedented market volatility. The reports were debunked as “misleading, speculative, and baseless”, said Tuhin Kanta Pandey, the DIPAM Secretary.
IDBI Bank’s shares have risen by 3.38% to Rs 45.9 at 2:53 pm today. The bank’s stock has decreased by 17% this year, causing a sharp decline in the bank’s market value to Rs 66,665 crore from about Rs 1,49,000 crore. The government and state-run Life Insurance Corporation of India (LIC) must sell at least 68% to fetch $4 billion at the current market value.