Govt may seek EoI for Concor disinvestment in Jan, extend IDBI Bank bid deadline

The last date for submitting the EoIs for strategic disinvestment of IDBI Bank is also likely to be pushed to mid-January since the government had received requests from interested bidders for an extension, the official said asking not to be named. The last date for submission of the initial bids is 16 December.

“The Concor EoI should be issued in January… IDBI EoI date may be extended, we have got requests for extending the deadline,” the official said. 

The government and Life Insurance Corporation of India are selling 60.72% stake in the strategic sale of IDBI Bank and transferring management control to the winning bidder. 

The terms and conditions of the transaction have been made more attractive as the government has allowed foreign funds, and investment vehicles incorporated outside India can own more than 51% in IDBI Bank. The government will adopt a two-stage process for divestment. In the first stage, bidders that meet initial eligibility criteria must clear a ‘fit and proper’ assessment by the Reserve Bank of India and get security clearance from the home ministry. Then, qualified bidders will sign a confidentiality agreement with the government and proceed to the second stage, where financial bids will be sought.

LIC will sell 30.24% of its 49.24% holding in the bank, while the government will dilute 30.48% of its 45.48% holding. At present, 5.28% is held by the public.

The official further added that the government was unlikely to restart the disinvestment process for BPCL as of now.

The official added that the government was waiting for the ministry of corporate affairs for approval of the demerger of assets of Shipping Corporation of India, which was likely this month, and will then proceed for strategic disinvestment, adding that the transaction was unlikely to be completed within this financial year.

“BEML, Shipping Corp unlikely that it will be completed this fiscal… we may receive the bids within this fiscal,” the official said. He added that BEML share allocation post demerger of assets has been completed.

He further stated that the process of share allocation post demerger of assets of NMDC had started. The government has invited preliminary bids for strategic sale of NMDC’s Nagarnar Steel Plant. The last date for submitting bids for NMDC Steel Ltd is January 27, 2023. The assets are being demerged from NMDC into a separate company NMDC Steel Ltd (NSL). Subsequent to demerger, shares of NSL will be listed on BSE, National Stock Exchange of India Limited and Calcutta Stock Exchange.

The transactions will, however, not help the government achieve its target of ₹65,000 crore for FY23, and the department of investment and public asset management (DIPAM), tasked with the disinvestment of government shareholding in public sector enterprises, will have to focus on offer-for-sale kind of transactions in existing listed PSEs for the remaining fiscal.

DIPAM secretary Tuhin Kanta Pandey said at a CII event on Friday that the government has already raised ₹62,000 crore in FY23, including ₹34,000 crore from dividends issued by PSEs to shareholders including the government.

“We have got actually 62,000 crores of resources already raised this year,” he said, noting that the CPSE Index had grown twice compared to equity index this year, showing the performance improvement of the PSEs and their returns to shareholders.

Pandey added that the government was undertaking several transactions including IDBI Bank, HLL Lifecare, BEML and SCI strategic sales, of which some were taking time since there was a need to demerge land assets.