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NEW DELHI : The last date for submitting the expression of interest for strategic disinvestment of IDBI Bank was extended to January 7, from present last date of December 16, the department of investment and public asset management said in a notice.
The government had sought bidders for selling 60.72% of IDBI Bank Limited held by the government and Life Insurance Corporation of India along with transfer of management control, through strategic disinvestment which began in October.
Officials have said that government had received requests from interested bidders for an extension, amid large interest for the strategic sale.
The terms and conditions of the transaction have been made more attractive further as the government has allowed foreign funds, investment vehicles incorporated outside India can own more than 51% in IDBI Bank.
The government also said that it may consider relaxing the five-year lock-in period for shares if a non-banking financial company or NBFC is merged into IDBI Bank.
the norms that are applicable to public sector banks will not apply to IDBI Bank after the government and LIC sell their stakes, even though they together will continue to hold about 33% in the bank. The government has also said that IDBI Bank will operate as a private sector bank even if it were to be taken over by a foreign bank.
The government has also clarified that it has applied for reclassification of its shareholding as a public shareholder, in response to queries that whether Centre and LIC will hold any board seats or participate in the management and governance of IDBI Bank after the sale.
At present, the government and LIC hold more than 94% stake in the bank. Both are classified as promoter shareholders.
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.
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John Miller has been writing about science, gaming, and tech culture for over a decade. He’s a top-rated reviewer with extensive experience helping people find the best deals on tech and more.
