Disinvestment: The government is going to sell this big bank next month, know how complicated is the whole process of privatization

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Disinvestment: The government is going to sell this big bank next month, know how complicated is the whole process of privatization


Photo:FILE Disinvestment

IDBI Disinvestment: Keeping in mind its disinvestment target, the government is going to sell its stake in IDBI Bank. According to the information received, the government may invite initial bids for stake sale in IDBI Bank next month. Giving this information, an official said that talks with the Reserve Bank of India (RBI) in this regard are in the final stages. The government has set a target of raising Rs 65,000 crore from disinvestment in 2022-23. Of this, Rs 24,544 crore has been raised.

There are still many obstacles

According to government sources, there are still some issues pending which need to be discussed with RBI and Securities and Exchange Board of India (SEBI). We expect to issue the Expression of Interest (EoI) by September. However, the official did not give details of regulatory issues that the government is discussing with banking and stock market regulators, RBI and SEBI respectively.

Sales unlikely this year

We expect a lot of inquiries from investors after the release of the EoI, the official said. “However, the stake sale process is not expected to be completed in the current financial year.” The Cabinet Committee on Economic Affairs (CCEA) in May 2021 gave in-principle approval for strategic disinvestment and transfer of operational control in IDBI Bank Was.

Government’s 45.48 percent stake

At present, the government holds 45.48 per cent stake in the bank. Life Insurance Corporation (LIC) holds 49.24 percent stake. The official said that there are still many issues to be resolved regarding the strategic sale. These include open offers to new buyers, the way the tie-up is formed. The government will decide, together with LIC, how much stake they want to sell in IDBI Bank before calling for the opening bids.

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