Money & Banking

IDBI Bank sell-off: Govt floats RFP for appointment of transaction and legal advisor

Our Bureau New Delhi | Updated on June 22, 2021

The last date forbid submission is July 13 and the bid will be opened on July 14

The government on Tuesday floated a Request for Proposal (RFP) to appoint transaction advisor and legal advisor to assist in the strategic disinvestment of IDBI Bank.

The last date for interested parties to submit their bid is July 13 and the bid will be opened on July 14.

At present, IDBI Bank is classified as a private sector bank by the RBI with government shareholding at 45.48 per cent, Life Insurance Corporation of India shareholding at 49.24 per cent and the non-promoter shareholding at 5.29 per cent. LIC is the promoter while Centre is the co-promoter.

Also read: IDBI Bank has transformed into a retail bank: Samuel Joseph, Dy MD

The government proposes to go for strategic disinvestment along with transfer of management control. However, the extent of shareholding to be divested by the government and LIC will be decided at the time of structuring of transaction in consultation with the RBI.

Divestment target

The government has set a target of ₹1.75-lakh crore to be raised through disinvestment this fiscal, out of which ₹1-lakh crore is intended to be raised through off-loading the government stake in public sector banks and financial institutions. This also includes the stake sale in IDBI Bank. On May 5, the Cabinet Committee on Economic Affairs (CCEA) approved the strategic disinvestment of IDBI Bank.

LIC’s Board has already passed a resolution to the effect that LIC may reduce its shareholding in IDBI Bankthrough divesting its stake along with strategic stake sale envisaged by the government with an intent to relinquish management control and by taking into consideration, price, market outlook, statutory stipulation and interest of policy holders.

Published on June 22, 2021

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