IDBI Bank disinvestment: The Reserve Bank of India (RBI) is currently evaluating several potential bidders who have expressed interest in acquiring a majority stake in state-owned IDBI Bank Ltd, according to three sources familiar with the situation, as reported by Reuters. Reported by.
Kotak Mahindra BankCSB Bank, backed by Prem Vats, and Emirates NBD are among the entities that have submitted expressions of interest for the stake, according to two unnamed sources due to the confidential nature of the talks.
Reuters was unable to confirm the names of other potential bidders.
reserve Bank of IndiaFinance Ministry, IDBIKotak Mahindra Bank, CSB Bank and Emirates Bank did not respond to requests for comment.
The stake sale in the lender is the first major disinvestment in state-owned banks as part of a wider privatization plan and could fetch the government 300 billion Indian rupees ($3.66 billion) at current market valuations.
The federal government holds 45.48% of IDBI Bank, and is looking to disinvest 30.48% stake in the lender along with state-owned Life Insurance Corp of India. (LIC)Which will sell 30.24% of its 49.24% stake in the bank.
The expression of interest – the first step in the stake sale process – closed in January, three of the people said.
Potential bidders have since started due diligence on the bank, according to the people, who said financial bids were likely to be placed later this year.
The people said the RBI is also carrying out a “fit and proper appraisal”, which includes extensive background and financial checks on potential buyers, a crucial step before allowing an investor to pick up a stake in a local bank.
Potential investors have raised questions about the extent of government control in IDBI Bank after the disinvestment as it will hold 15% stake and LIC, a government company, will hold 19%, two of the people said.
One of the people said, “The government has no management control.” “The government will take a call if written submissions are required to that effect.”
Management consultant Ashwin Parekh said buyers with existing banks may eventually need to merge operations with IDBI as RBI regulations do not allow the same investor to own two banking entities.
He added that a merger would reduce the amount of equity held by the government and LIC, potentially alleviating concerns over government control.
The text of this story is published from a wire agency feed without any modification. Only the headline has been changed.
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