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IDBI to continue as ‘Indian private sector bank’ post strategic sale

Department of investment and public asset management (Dipam) said that the winning bidder will have no restriction on undertaking a corporate restructuring of the subsidiaries of the bank. I

IDBI Bank, Indian private sector bank, IDBI private sector bank, MPS minimum public shareholding, Business news, Indian express, Current AffairsOn October 7, the Centre invited expressions of interest for IDBI Bank and offered to sell a total of 60.72% stake, including 30.48% from the govt and 30.24% from LIC.

The government’s residual 15 per cent stake in IDBI Bank post the strategic disinvestment of the lender will likely be considered as ‘public shareholding’ and a reasonable period may be given to the potential buyer to comply with minimum public shareholding (MPS) norm, finance ministry said on Sunday. IDBI Bank will operate as an ‘Indian private sector bank’ after its strategic sale.

Department of investment and public asset management (Dipam) said that the winning bidder will have no restriction on undertaking a corporate restructuring of the subsidiaries of the bank. It also said that certain asset sizes and timing thresholds related to asset stripping would be provided to give flexibility in operations to the successful bidder.

“The aspects in respect of the treatment of GOI’s residual shareholding and the appropriate transition period for MPS compliance are under due consideration and would, accordingly, be suitably advised to the Qualified Interested Parties at the request for proposal stage,”  Dipam said responding to a batch of 167 queries from potential buyers. On October 7, the Centre invited expressions of interest  for IDBI Bank and offered to sell a total of 60.72 per cent stake, including 30.48 per cent from the government and 30.24 per cent from LIC, along with the transfer of management control. Yet, both the government and LIC will have a 34 per cent residual stake in the lender (19 per cent and 15 per cent by LIC and government, respectively).

According to Sebi, a company is required to have a minimum shareholding of 25 per cent within one year of the merger with/acquisition of a private company or three years after listing. FE

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First published on: 28-11-2022 at 02:15 IST
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