There is new buzz in the long-awaited privatisation process of IDBI Bank. A latest media report says that Kotak Mahindra Bank has also joined the race for the stake sale of the bank.
As per the report by NDTV Profit, apart from Oaktree Capital and Fairfax, Kotak Mahindra Bank has also shown interest. However, it should be noted that Kotak Mahindra Bank has not officially confirmed or denied the development. Moneycontrol can't independently verify the report.
Elaborating on the major concerns of the suitors, the NDTV Profit report says that the biggest issue is the humongous market capitalization of IDBI Bank.
At Rs 1 lakh crore m-cap, it will be difficult for investors to acquire a 60 percent stake in the entity. However, the report adds that with the benefit of equity currency, Kotak Mahindra Bank may aim for a part-equity, part-cash merger deal.
The Centre has previously said that it is looking to finalise the IDBI Bank privatisation by the end of the 2026 fiscal. In terms of structure, 45.48% stake in IDBI is held by the Centre, whereas 49.24% is owned by the Life Insurance Corporation of India. The Department of Investment and Public Asset Management (DIPAM) has been tasked with the 61% stake sale in IDBI Bank.
A Reuters report says that India has completed due diligence for the stake sale of IDBI Bank and plans to invite financial bids between October and December, the country's divestment secretary said earlier this month. The sale process was first announced in 2022.
LIC was previously classified as a promoter shareholder in IDBI Bank, a status it acquired after taking control of the lender in 2019. As a promoter, LIC had board representation and strategic influence over the bank's operations. The reclassification strips LIC of those rights, aligning its role with that of a financial investor.
IDBI Bank closed at Rs 100.25 on the BSE in Friday’s trade, down Rs 2.60, or 2.53%.
(With inputs from Reuters)
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