The top three shareholders in the company are LIC with 25.34%, ORIX Japan with 23.04% and Abu Dhabi Investment Authority with 11.09% stake.
Sources added that Central Bank has appointed SBI Capital Markets to look for a potential buyer.
In an earlier instance of a large shareholder increasing its stake in another non-core entity, US-based TransUnion bought the entire stake of Punjab National Bank and Central Bank of India in Cibil. TransUnion is now the largest shareholder with 55% in the credit information company.
Sources told FE that public sector lender Central Bank of India was planning to earn R860 crore from selling close to 1 crore shares of IL&FS.
Central Bank of India owns 98.43 lakh shares in IL&FS. According to the company's website, the bank shareholding amounts to 8.34% of the total paid-up capital.
With a view to unlock the value of its strategic investments, the bank intends to disinvest its equity shareholding in IL&FS partly/ fully to interested buyer by way of sale through a competitive bidding process, Central Bank had later said.
The finance ministry is asking banks to explore the possibility of hiving-off non-core businesses, including insurance and mutual funds, to raise funds to meet Basel III capital adequacy norms. Basel III norms on capital adequacy will come into effect from April 2019 and according to finance minister Arun Jaitley, banks would require R2.4 lakh crore capital infusion to meet Basel III.
Banks had funded a number of companies created by the government and the RBI. Companies like NSE, UTI, Cibil, Clearing Corporation of India, Stock Holding Corporation of India, Central Depository Services (India), CARE and IL&FS were established as financial market intermediaries.