The Department of Investment and Public Asset Management (DIPAM) has invited expressions of interest (EoIs) from potential bidders for strategic divestment of specified Government of India and LIC stakes in IDBI Bank along with transfer of management control.
The government and Life Insurance Corporation (LIC) will together divest a 60.72 percent stake in the lender. The Centre will divest a 30.48 percent stake while LIC will offload 30.24 percent. The last date and time for submission of IDBI Bank EoIs is December 16 and all the EoIs shall be valid for 180 days and can be further extended by another 180 days.
"Expression of Interest is invited for Strategic Disinvestment of specified GoI and LIC stakes in IDBI Bank along with tranfer of management control," tweeted Secretary, DIPAM.
"The successful bidder is required to make an open offer to public shareholders of IDBI Bank," DIPAM noted.
The criteria of ‘Fit & Proper’ will be imposed. In addition to that assessment by RBI at the EoI stage, it is clarified that ‘successful bidder’ would also be subject to the ‘Fit & Proper’ assessment by RBI.
Listed private banks, NBFCs, SEBI-registered AIFs are eligible to bid, as well as PE funds, foreign funds and investment vehicles.
However, DIPAM also stated that large industrial/corporate houses and individuals (natural persons) shall not be permitted to participate in this bidding process for the transaction, either on its own or as a part of a consortium.
Eligibility criteria for biding for IDBI Bank stake:
-Bidders must have a minimum net worth of Rs 22,500 crore or equivalent in respective currency
-Bidders must have reported Profit After Tax (PAT) for minimum 3 of last 5 years
-Consortia Tendering bids must have max 4 entities
-Lead member of consortium must have minimum 40 percent equity contribution in consortium
- The acquirer needs to bring down equity stake in IDBI bank to 26% in 15 years •
-40 percent of equity bought by acquirer will be subject to 5-year lock-in period
Currently, the Central government holds 45.5 percent in IDBI Bank and Life Insurance Corporation of India owns 49.24 percent.
Since the Cabinet Committee on Economic Affairs approval, several meetings have been held within the government and between the government and the Reserve Bank of India, the Securities and Exchange Board of India and the Insurance Regulatory and Development Authority of India over various issues related to the stake sale.
The CCEA had given in-principle approval for strategic disinvestment and transfer of management control in IDBI Bank in May 2021.
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