The Central government is preparing a detailed plan to dilute its 20 percent stake in five public sector banks each, Business Standard reported on February 26.
The blueprint is being developed in discussion with the department of investment and public asset management (Dipam), the department of financial services and public sector banks, the report said.
The move is being planned to meet the Securities and Exchange Board of India’s (Sebi’s) minimum public shareholding norm, the newspaper said. The government is likely to opt for both offer-for-sale (OFS) and qualified institutional placement (QIP) routes to dilute its stakes, BS said.
Moneycontrol could not independently verify the report.
The banks set to see dilution are Bank of Maharashtra, Indian Overseas Bank, UCO Bank, Central Bank of India and Punjab and Sind Bank, according to the report, adding that the plan is to bring the shareholding to below 75 percent.
Earlier on February 25, it was reported that Dipam has invited bids from merchant bankers facilitate the stake sale in public sector lenders and listed public financial institutions.
As per the RFP (request for proposal) floated by DIPAM, the merchant bankers would be empanelled for a period of three years (further extendable by 1 year) and they would advise the government on the timing and the modalities of the transaction for dilution of equity in select PSU banks/select listed public financial institutions.
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