The quantum of stake dilution by the Centre and Life Insurance Corporation of India (LIC) for ceding management control in IDBI Bank could be up to 65 percent, CNBC TV-18 reported on July 25 citing sources.
The government is likely to float an expression of interest (EoI) in August or September for privatising IDBI Bank, the sources noted. The government could allow private equity (PE) firms a majority stake in IDBI Bank as part of divestment.
The Department of Investment and Public Asset Management (DIPAM) on July 9 had clarified that since LIC's stake will be sold alongside the government's shareholding, there will be only one transaction advisor who would manage the entire share sale process.
The central government and LIC together own nearly 95 percent equity of IDBI Bank.
At present, in IDBI Bank, the government's shareholding is at 45.5 percent, LIC has a 49.24 percent stake, and the non-promoter shareholding is at 5.29 percent.
Also Read: Govt steps up bid to sell IDBI Bank stake, talks to potential suitors including Fairfax’s Prem Watsa
The strategic sale of the government's and Life Insurance Corporation's (LIC) whole share in IDBI Bank was approved by the Cabinet in May.
And, on July 9, the DIPAM announced that the Cabinet Committee of Economic Affairs (CCEA) has given its go-ahead to the government and LIC to offload 100 percent of their stake in IDBI Bank, along with a transfer of management.
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