Govt Set to Launch IDBI Bank Sale Process Next Week

The Centre is looking to kickstart the privatization of IDBI Bank this month, with its advisor KPMG reaching out to multiple suitors – including large private equity buyout funds and long-only funds – inviting them to a roads-how next week, said people aware of the matter.

This will be a virtual interaction, to be attended by government officials and the bank’s management.

For the moment, the government is open to selling its entire 94.71% stake. This includes LIC’s 49.24% equity stake, which comes with management control. The central government holds another 45.48%. The non-promoter shareholding in the bank currently stands at only 5.29%.

The sale of IDBI Bank will be the first case in India of “voluntary discovery” of the buyer through an open bidding process.

Generally, this route has been used to sell banks which are in trouble. Further, as an insurer, LIC has to commit to exiting its exposure as a pre-requisite for its initial public offering for which the DHRP was filed on February 13. S-ET

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