The Securities and Exchange Board of India (Sebi) has allowed the Centre to reclassify its holding in IDBI Bank as ‘public’ following divestment of its stake, on the condition that its voting rights do not exceed 15%, the bank said in a regulatory filing on Thursday.
In a letter to the Department of Investment & Public Asset Management (DIPAM), the regulator said it allowed relaxation under the Sebi Listing Obligations and Disclosure Requirements (LODR) regulations for reclassification. In addition, the buyer will have to adhere to the minimum public shareholding norms within a year of acquisition.
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The government is also required to specify its intention to reclassify its holding as ‘public’ in the offer letter to IDBI Bank shareholders.
According to shareholding data from the BSE, the Centre holds a 45.48% in IDBI Bank, while LIC holds 49.24%.
The government and LIC had in October expressed their intent to sell a combined 60.72% in the lender. The DIPAM had said potential buyers mandatorily need to have a net worth of ₹22,500 crore and must have reported a net profit in three of the previous five years to become eligible.
The DIPAM has also allowed foreign banks or funds, or investment vehicles incorporated outside India, to bid for IDBI Bank. The final approval by the RBI will be based on assessment of the buyers in accordance with the “fit and proper” criteria.
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According to earlier reports, IDBI Bank will continue operating as in Indian private sector bank following the share sale. On Thursday, the IDBI Bank stock edged up 0.37% to ₹54.85 on the NSE.