Life Insurance Corporation of India and the government are about to sell their stake in IDBI Bank. This information was given by the Department of Investment and Public Asset Management.
Life Insurance Corporation of India (LIC) and the government are soon going to sell their stake in IDBI Bank. The proposal to sell 100 percent stake in LIC has been approved by the Cabinet Company for Economic Affairs. The Department of Investment and Public Asset Management (DIPAM) gave this information. According to the department, the Government of India and LIC’s stake in IDBI Bank will be sold in the upcoming transaction. Along with this, management control will also be transferred.
LIC currently holds 49.24 percent stake in IDBI Bank. While the government has 45.48 percent stake in this bank. The rest 5.29 per cent is held by non-promoters. Now the government and LIC have made up their mind to sell their 100 percent stake in IDBI. DIPM said that bidding will be done under open offer under the guidelines of SEBI. However, during this period, DIPAM has barred public sector banks from bidding for IDBI Bank.
DIPM said that IDBI Capital Markets will also not be able to bid to become transaction advisors. Further, any person or company holding more than 50 per cent stake or controlling stake in the merchant banker will also not be allowed to bid for IDBI Bank. On Friday, IDBI Bank’s share price rose 3.19 per cent to close at Rs 38.80.
Let us inform that the insurance company LIC had acquired a controlling stake in IDBI Bank in January 2019. Finance Minister Nirmala Sitharaman had said in her budget for 2021-22 that the process of privatization of IDBI Bank would be completed in the current financial year. The government aims to raise Rs 1.75 lakh crore from minority stake sale and privatization in the current financial year.
DIPM had last month invited bids for management and advice on the strategic sale and transfer of management control in IDBI Bank. Transaction consultants and law firms took part in these.
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