The Centre will likely invite expression of interest for strategic disinvestment of IDBI Bank by end-July, a top government official said on Friday.
The Department of Investment and Public Asset Management (Dipam), which held roadshows in the US in the last few days, will have a few more domestic roadshows before finalising the contours of the sale, the official said.
“We may need one more round of discussion with the Reserve Bank of India on IDBI strategic sale. Thereafter, we will decide what will be the consortium structure in case of joint bids and merger conditions (if the winning bidder wants to merge IDBI Bank with another existing lender),” the official said.
Besides banks, financial investors (other than corporate houses) are the potential bidders for IDBI Bank.
Currently, LIC (49.24%) and the government (45.48%) together hold 94.78% stake in IDBI Bank worth about Rs 38,000 crore at the current market prices. Both the government and LIC plan to sell majority stake to a buyer and handover the management control.
To make the deal attractive, the government has approached the RBI to consider giving the potential buyer of IDBI Bank some leeway on complying with the regulatory norms for private banks, including a time-bound reduction in promoter holdings. It has also urged the Securities and Exchange Board of India (Sebi) to give some flexibility to the strategic investor in IDBI Bank on the minimum public float norm for listed companies.
IDBI Bank shares ended at Rs 36.7 on Friday, down 2% from the previous closing on the BSE.