New Delhi: The Indian government is thinking of selling at least 51 per cent of IDBI Bank Ltd, a state-owned entity, people in the know said.
Government representatives and the state-backed Life Insurance Corp. of India, which together own approximately 94% of the shares in IDBI Bank, are reportedly in discussions about how much of their holdings they intend to sell. The persons, who requested anonymity because the information is private, stated that both parties anticipate holding onto a stake in the lender following the sale.
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The ultimate choice about the deal’s structure will be made by a committee of ministers, according to the sources. One of the persons stated that the government and LIC will formally attempt to determine buyer interest as early as the end of September.
In the last year, shares of IDBI Bank have increased 6.3%, giving the company a market value of around 424.7 billion rupees ($5.3 billion).
The government and LIC intend to sell at least a portion of their ownership holdings in IDBI Bank and hand over management. According to Bloomberg News, the Reserve Bank of India will let investors to buy stakes higher than 40%. When purchasing stakes above that level, entities managed by the regulator often need permission, whilst non-regulated corporations are restricted to purchases of 10% to 15%.
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In order to raise 650 billion rupees through numerous disinvestments this year, the government needs to expand the pool of possible buyers, reenergize its privatisation efforts, and strengthen its finances. More over a third of the target amount has already been raised, mostly from LIC’s $2.7 billion IPO.
