The Centre’s privatisation efforts on IDBI Bank is very much on and the actual quantum of government stake sale will be decided after the roadshow is complete, Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said on Friday.
Currently, central government owns 45.48 per cent stake, while LIC has 49.24 per cent shareholding in IDBI Bank.
“The quantum of exit will be known post roadshow and then the structure of Expression of Interest will be finalised. One thing is very sure that management control will be passed on. Currently, it is with LIC. But, management control at what level of equity will have to be decided when we have decided the structure of EoI,” Pandey said in the capital during an event on LIC IPO roadshow.
The government may decide to sell its entire stake in one go or in tranches, depending on the investors’ response. .
it maybe recalled that Cabinet Committee on Economic Affairs had in May last year given in-principle approval for strategic disinvestment and transfer of management control in IDBI Bank.
Necessary amendments to the IDBI Bank Act have already been made through the Finance Act 2021. Also transaction advisors have been appointed.
IDBI Bank became a subsidiary of LIC with effect from January 21, 2019, following the acquisition of an additional 8,27,590,885 equity shares.
On December 19, 2020, the lender was reclassified as an associate company due to the reduction of LIC shareholding to 49.24 per cent, following the issuance of additional equity shares by IDBI Bank under Qualified Institutional Placement.