The shortlisted bidders of IDBI Bank will likely get access to the banks’ virtual data room for a better understanding of the business of the bank and to clarify their doubts, moving the transaction process to the next stage.
In July, the Reserve Bank of India had given ‘fit & proper’ nod to the shortlisted bidders. The government is aiming to execute the transaction in the current financial year.
This will be the first strategic disinvestment of a bank with a significant government holding, an erstwhile public sector bank. The government had received multiple expressions of interest (EoI) on January 7, 2023 for a total of 60.72% stake in the bank, including 30.48% (approx. Rs 28,460 crore) from the government and 30.24% from promoter LIC, along with the transfer of management control in the bank.
Post-sale, the Government and LIC together will have a 34% residual stake in the lender (19% by LIC and 15% by the government).
Besides access to the banks’ virtual data room, the bidders would also go through the draft Share Purchase Agreement (SPA) in which the government and promoter LIC would work towards satisfying a set of conditions including various regulatory approvals.