The strategic sale of state-owned IDBI Bank is likely to get pushed to FY25 due to lengthy regulatory procedures, as the Reserve Bank of India (RBI) continues to assess bidders that have submitted their expression of interest (EOI), CNBC-TV18 reported.
The bidders of the bank are still undergoing fit and proper assessment, seven months after the EOIs were submitted on January 7, 2023, according to the report.
Qualified bidders will only be able to do due diligence of IDBI Bank once they get regulatory clearance from the RBI. Until then, the Centre will not be able to call for the IDBI financial bids either, the report added quoting sources.
Last month, a senior govt official had told Moneycontrol that the financial bids of IDBI will likely be invited by December. The Government aims to get approximately Rs 16,000 crore in this financial year from the strategic sale. “From the IDBI strategic sale, the government will get a good amount of Rs 15,000-16,000 crore. The strategic sale should move this year. Government is targeting financial bids by December and close the deal in the fourth quarter,” the official had said.
The Life Insurance Corporation of India (LIC) will continue to hold some stake in IDBI Bank even after the sale of the lender, said Chairman Siddhartha Mohanty in an exclusive interview with Moneycontrol on August 14.
"IDBI is our largest bank partner, so we would continue to have some stake in IDBI, (and) our bank partnership continues," he said.
Presently, the government and LIC, together, hold 94.71 percent stake in the bank. Of this, LIC holds 49.24 percent.
IDBI Bank reported a jump of 62 percent in net profit at Rs 1,224 crore for the April-June FY24 quarter on July 24. The private-sector lender reported a net profit of Rs 756 crore in the corresponding quarter last year.
Net Interest Income (NII) of the bank stood at Rs 3998 crore, growing by 61 percent on a year-on-year (YoY) basis from Rs 2448 crore.
The lender's net interest margin (NIM) improved by 178 bps to 5.8 percent for Q1-2024 as compared to 4.02 percent for Q1-2023.
The gross non-performing asset (GNPA) of the bank declined to 5 percent compared with 20 percent last year. The net non-performing assets (NNPA) of the bank also fell to 0.44 percent compared with 1.26 percent last year.
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