The Life Insurance Corporation (LIC) of India and the central government are likely to offer a 60 percent stake for sale in IDBI Bank, CNBC-TV18 reported on September 6. The Expression of Interest (EoI) for the divestment process will be invited by October.
It was earlier reported that LIC and the government could sell up to 65 percent stake in IDBI Bank. The two currently own close to 94 percent in IDBI Bank, out of which the Centre owned 45.48 percent stake and LIC held 49.24 percent, as of June 30.
The government will be seeking due diligence from the Reserve Bank of India (RBI) at every step in the divestment process.
There is no cap on promoter holding subject to submission of a plan to reduce stake in 15 years. However, the 26 percent voting rights cap stays for the divestment.
At the time of writing, the IDBI stock was trading at Rs 43.55 per share, about 0.46 percent higher.
The Government of India announced its intention to exit IDBI Bank in 2021. The disinvestment strategy refers to the liquidation or sale of the assets owned by the government.
Disinvestment is used as a technique by governments to reduce their fiscal burdens, and thus raise money for public needs. It can also be done to privatise the assets.
The stake sale of IDBI Bank has witnessed many ups and downs, and the process has been delayed quite a bit. The government had initially planned to invite the EoI in May, but the process got delayed due to its attempts to reach out to potential buyers as well as bidders.
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