Centre may call for preliminary bids next month

NEW DELHI: The government is likely to invite preliminary bids for selling a stake in IDBI Bank next month and the discussions with the RBI are at the final stages, an official said.

“There are still some pending issues that need to be discussed with the Reserve Bank of India and Securities and Exchange Board of India. We are hopeful of issuing the EoI by September,” the official said.

The official, however, did not divulge details of regulatory issues on which the government is holding discussions with banking and equity market regulators RBI and Sebi, respectively.

“Since IDBI Bank would be first of its kind with regard to privatisation in the banking sector, we are expecting a lot of investor queries to come in once the Expression of Interest (EoI) is floated. The stake sale is unlikely to conclude this fiscal,” the official added.

The Cabinet Committee on Economic Affairs had given in-principle approval for strategic disinvestment and transfer of management control in IDBI Bank in May 2021.

Currently, the government holds 45.48 per cent in the bank, and Life Insurance Corp of India, which is currently the promoter of the bank, owns a 49.24 per cent stake.

“Strategic sale is uncharted territory. There are a lot of issues to be addressed, including an open offer to be made to the new buyer, mode of consortium formation and others,” the official said.

The government, along with LIC, will decide on the quantum of stake that they will sell in IDBI Bank before seeking initial bids, the official said, adding it would be outlined in the EoI.

The government has set a target of Rs 65,000 cr from divestment in 2022-23 (April-Mar), out of which it has already raised Rs 24,544 cr.