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IDBI Bank’s board of directors on Tuesday gave ‘in-principle’ approval to a proposal to divest some of its non-core investments. Apparently, this move, which is subject to compliance with all applicable laws and regulations, is aimed at shoring up the bank’s capital.
This also comes at a time when the public sector bank’s net worth (excluding intangibles) declined 26 per cent year-on-year from ₹19,323 crore as at December-end 2015 to ₹14,258 crore as at December-end 2016.
As part of its disinvestment exercise, the public sector bank may look at bringing down its stake in companies such as IDBI Federal Life Insurance IDBI Capital Market Services, IDBI Intech, IDBI Asset Management Company, National Stock Exchange, National Securities Depository, and NSDL E-Governance Infrastructure. At a press meet last year, Kishor Kharat, MD and CEO, said: “Most of the non-core assets, which are not giving any value addition to us, will be monetised in the next three years. Everyone knows that the NSE is a low-hanging fruit. I can dilute that also.”
IDBI Bank has 48 per cent stake in IDBI Federal Life, 100 per cent stake each in IDBI Capital and IDBI Intech, 66.67 per cent stake in IDBI AMC, 5 per cent in NSE, 30 per cent each in NSDL and NSDL E-Governance.
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