ICICI Securities on Wednesday sought bids for IDBI Bank-owned IDBI Asset Management and IDBI MF Trustee Company as part of the lender’s ongoing effort to sell off its non-core assets to raise
ICICI Securities on Wednesday sought bids for IDBI Bank-owned IDBI Asset Management and IDBI MF Trustee Company as part of the lender’s ongoing effort to sell off its non-core assets to raise capital.
IDBI Bank has a 66.67% stake in its asset management arm and the rest is held by IDBI Capital Markets & Securities. IDBI MF Trustee Company is a wholly-owned subsidiary of the bank.
To be eligible, potential investors would need to either have assets under management (AUM) of at least `1,000 crore as on March 31, 2019, or later, or a net worth of at least Rs 1,000 crore as per the last audited balance sheet of the entity. Alternatively, the bidder’s consolidated net worth should be no less than `2,000 crore or an equivalent amount as per the last audited balance sheet of the entity.
“Potential investors will also need to execute a non-disclosure agreement (NDA) in a stipulated format to be able to receive further information on the proposed transaction. The format of the NDA shall be shared in due course,” ICICI Securities said in a public notice.
The total AUM of IDBI Mutual Fund stood at Rs 7,241.43 crore as on March 31, 2018, against Rs 4,697.51 as on March 31, 2017. Total income increased to Rs 83.39 crore during financial year 2017-18 from `65.06 crore during FY17. Its net profit rose to Rs 8.01 crore in FY18 from Rs 7.25 crore in FY17. During FY18, IDBI Asset Management’s authorised share capital was Rs 250 crore, while its issued, subscribed and paid-up share capital was `200 crore, divided into 20 crore equity shares of Rs 10 each.
IDBI MF Trustee’s total income stood at Rs 81.80 lakh in FY18, up from Rs 66.32 lakh during FY17. Net profit increased to Rs 21.98 lakh in FY18 from Rs 12.52 lakh during the previous financial year.
IDBI Bank is currently under the Reserve Bank of India’s (RBI) prompt corrective action (PCA) framework, which entails strict curbs on business growth and capital consumption. As a result, they have resorted to sale of non-core assets to monetise their assets.