Indian government is holding roadshows to gauge investor interest as it seeks to privatise IDBI Bank, Minister of State for Finance Bhagwat Karad said.
The government will come forward with an expression of interest (EoI) after it has assessed investor interest, the minister said.
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The government along with the Life Insurance Corporation of India (LIC) holds over 94% stake in the lender.
With a 49.24% stake, LIC currently holds the management control of the lender, while the government has 45.48%. The remaining stake is held by non-promoters.
The government expects the IDBI Bank’s buyer to pump money in the lender while bringing new technology and best management practices enabling it to operate without dependence on current majority shareholders for capital, Karad told the lower house of India’s parliament.
“… roadshows are currently being held to assess the investors’ interest before floating the Expression of Interest (EoI),” Karad’s written reply read.
Additionally, the minister noted that while working out the details of the sale, concerns of the existing employees and other stakeholders are taken care of via provisions made in the share purchase agreement.
In May 2021, the Indian cabinet approved the strategic disinvestment and transfer of management control in IDBI Bank.
As per PTI’s earlier report, the government plans to invite EoI by the end of April and may sell around a 26% stake in the bank along with management control.
Eventually, the government will dilute its entire shareholding in the bank. Notably, the stake to be diluted by the government and the life insurer will be decided in consultation with the Reserve Bank of India (RBI)- the country’s central bank.
