The government’s long-awaited disinvestment of IDBI Bank is progressing steadily, with several critical steps now underway, DIPAM Secretary Arunish Chawla has said.
Shares of IDBI Bank are sharply higher by over 3 percent on April 9.
Speaking to CNBC-TV18 earlier this week, Chawla called the 'multi-stage' process as 'fairly complex', involving multiple workstreams moving in parallel. “The virtual data room is active, all the queries are being answered, we’re negotiating the shareholders’ agreement, and we’ve already appointed an asset valuer,” Chawla said, adding, “Everything is going forward like a parallel computer.”
DIPAM Secretary refrained from giving a definitive timeline, but hinted that the deal could close in the first half of FY26. In response to a question over a possible H1FY26 timeline, he said, “Fingers crossed, we are hopeful.”
Read More: IDBI Bank stake sale on track, final decision in 3-4 months: DIPAM Secretary
Speculation has swirled around the interested parties for the asset, however, Chawla has declined to comment on the identities of any potential bidders. “We do not comment on potential bidders,” he said.
DIPAM Secretary is keen that fund managers should include PSU stocks in their portfolios, and according to some reports, officials of divestment department are slated to meet mutual funds in Mumbai next week.
The IDBI Bank disinvestment is a critical test case for the government’s strategic disinvestment policy, which aims to reduce its stake in non-strategic public sector enterprises while attracting long-term private capital. The Centre and LIC currently hold a combined 94.72% stake in the bank, with plans to divest a majority stake to a strategic buyer.
The transaction had initially been expected to close by FY24-end, but complexities around valuation, regulatory clearances, and bidder due diligence have led to delays.
The Government of India and LIC together aim to divest a 61% stake in IDBI Bank, comprising 30.48% held by the Centre and 30.24% by LIC. The disinvestment process formally began in January 2023 with the Department of Investment and Public Asset Management (DIPAM) inviting Expressions of Interest (EoIs). Following this, the names of interested bidders were forwarded to the Reserve Bank of India (RBI) for due diligence. Once regulatory clearance was secured, shortlisted bidders were granted access to IDBI Bank’s virtual data room for further evaluation.
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