India Likely To Invite Preliminary Bids For IDBI Bank Stake Sale Next Month

The government is likely to invite next month preliminary bids to sell its stake in IDBI Bank Ltd., an official said on Tuesday.

"There are still some pending issues that need to be discussed with the Reserve Bank of India and Securities and Exchange Board of India. We are hopeful of issuing the EoI (Expression of Interest) by September," the official told Press Trust of India.

The official refused to disclose any further details.

"Since IDBI Bank would be first of its kind as far as privatisation in banking sector is concerned, we are expecting a lot of investor queries to come in once the Expression of Interest is floated. The stake sale is unlikely to conclude this fiscal," the official said.

The Cabinet Committee on Economic Affairs had in May 2021 given its in-principle approval for strategic disinvestment and transfer of management control in IDBI Bank. The government, at present, has 45.48% stake in the lender while Life Insurance Corporation of India holds 49.24% stake. The government, along with LIC, will decide on the quantum of stake sale before seeking initial bids, the official said.

"Strategic sale is uncharted territory. There are a lot of issues to be addressed, including an open offer to be made to the new buyer, mode of consortium formation and others," the official said.

The government has set itself a disinvestment target of Rs 65,000 crore in fiscal ending March 2023. Of this, Rs 24,544 crore has been raised.