Winning Bizness Desk
Mumbai. The process of privatization of IDBI Bank is in full swing and the bids are likely to be invited by March next year. At the same time, the end of the sale process may take place in the next financial year. Officials said the government had last week invited bids from potential investors to privatize the bank by selling a total of 60.72 per cent stake in IDBI Bank. For this, the last date for submission of bids or letters of interest (LOIs) has been fixed as December 16, 2022. Access to the data room will be provided to the eligible bidders after approval of EOI and due and appropriate evaluation of the interested applicants by Reserve Bank of India and security clearance from the Ministry of Home Affairs.
It takes about six months
According to experts it normally takes almost six months to complete the process and receive the financial bids. Officials are hopeful of inviting financial bids for IDBI Bank by March. Considering that this will be the first case of strategic sale in the bank, a lot of questions are also expected to arise during the process. According to officials, the process of strategic sale of IDBI Bank is likely to end by September. The potential investor should have a minimum net worth of Rs 22,500 crore to apply. Also, to be eligible for bidding, the company must be in a net profit in three of the last five years.
60.72 per cent of the equity share capital of IDBI Bank
The government will sell its 30.48 percent and LIC 30.24 percent stake in this bank. Life Insurance Corporation of India (LIC) currently holds 49.24 per cent stake in IDBI Bank with 529.41 crore shares while the central government holds 45.48 per cent stake with 488.99 crore shares. At the same time, after the stake sale, the combined stake of LIC and the government in the bank will come down from 94.72 percent to 34 percent. The holding of both together constitutes 60.72 per cent of the equity share capital of IDBI Bank. The Reserve Bank of India declared IDBI Bank as a private sector bank with effect from January 21, 2019, after LIC acquired 51 per cent of the total paid-up equity share capital of the bank.