Government proposes to gauge response to IDBI Stake Sale

Government proposes to gauge response to IDBI Stake Sale

IDBI Stake sales jeg
  • The Government has planned to wait till completion of its stake sale in IDBI Bank and watch investor response before going ahead with the privatization of other state=run lenders.
  • The response and other challenges will be formulated for further privatization in the financial sector, as per reports received.
  • Currently the Government is in the process of selecting advisers for IDBI take sale. Bank of Maharashtra, Bank of India and Indian Overseas Bank are frontrunners to be privatized next.
  • Also there is possibility of Central Bank of India being taken up based on its financial recovery.
  • The cabinet committee of Economic Affairs has approved a proposal permitting both Government and LIC to sell their entire stake in IDBI along with the transfer of management to the new owner.
  • However, it is not yet clear as to how much of stake will be sold. The Government holds 45.5% of the Bank, and Life Insurance Corporation owns 49.24%.
  • In a strategic investment plan, there is little value in selling stakes placemeal and there is no halfway. Attempts are made to maximize the value.
  • The department of investment and public asset Management had clarified its points on queries raised by potential transaction advisors that th emaount of stake dilution would be declared before the request for proposal stage of the transaction.
  • The department had last month invited bids to appoint legal and transaction advisers for IDBI’s strategic disinvestment.
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