IDBI Bank divestment on track, delays unlikely: DIPAM

IDBI Bank’s disinvestment is on track as per the defined strategic sale process, said the government on Friday, March 17..

The Department of Investment and Public Asset Management (DIPAM) refuted media reports that suggested there might be a potential of delaying the disinvestment of IDBI Bank and stated that the stake sale is currently in the post-EoI stage.

"The transaction continues to be on track as per the defined process in post-EoI stage following receipts of multiple EoIs," tweeted DIPAM Secretary Tuhin Kanta Pandey. 

Reports appearing in a section of the media indicating the possibility of deferment of IDBI Bank disinvestment are misleading, speculative and baseless. The transaction continues to be on track as per the defined process in post-EoI stage following receipts of multiple EoIs. pic.twitter.com/HL8a1Xc3H5

— Secretary, DIPAM (@SecyDIPAM)

The government and the LIC are reportedly selling about 61 per cent stake in IDBI Bank and received multiple Expressions of Interest (EOIs) for the same in the month of January. 

DIPAM, which oversees the government's holding in state-owned businesses, issued an invitation for expressions of interest in selling a 30.48 percent stake in IDBI Bank and LIC's 30.24 percent stake in the bank in October of last year.

Together, the government and LIC own 94.72 percent of IDBI Bank, which will decrease to 34 percent following the strategic sale.

Govt and RBI vetting the bids 

Presently, the government and the RBI are reviewing the submitted proposals. To proceed to the second step of the bidding procedure, which is due diligence and the subsequent solicitation of financial bids, the bidders must first obtain security clearance from the government and Fit and Proper clearance from the RBI.

The investors who put in the EoI have already provided the necessary details to secure a fit and appropriate clearance.

The transaction is anticipated to be completed in the second half of the following fiscal year beginning in April 2023. Following the acquisition, the government would own 15% of IDBI Bank and LIC would own 19%, bringing their combined ownership to 34%.

Tuhin Kanta Pandey, the secretary of DIPAM, had earlier stated that the government is likely to sell a portion of its remaining share in Hindustan Zinc Ltd by the end of the month in order to help it reach the revised sell-off target of Rs 50,000 crore for the current fiscal year.