The government on Tuesday (22 June) took a step ahead for the strategic stake sale in the IDBI bank. It invited bids to appoint transactions and legal advisors to assist in the strategic sale of its equity, along with transfer of management control, in IDBI Bank to private players, reports Indian Express.
The stated move by the government led to an enhanced interest from the investors and the shares of the lender jumped nearly 6 per cent in the early trade hours of Wednesday (23 June).
The Department of Investment and Public Asset Management (DIPAM) said that the last date for submission of bids by both transaction advisors and legal advisors is 13 July.
“(The advisor will) assist GoI in fixing the range of the fair reserve price considering the valuation of IDBI Bank Limited, based on the methods employed in the financial services sector and highlighting the pros and cons of various methods and also highlighting the fact that many variations of these valuations exist. The GoI will have the option of valuation done from any other agency,” said the RFP document.
At present, the Centre holds 45.48 per cent, and the Life Insurance Corporation (LIC) a 49.24 per cent stake in the bank.
Last month, the Cabinet had given in-principle approval for IDBI Bank's strategic disinvestment. The move had come after the Reserve Bank of India (RBI) took IDBI Bank out of the Prompt Corrective Action (PCA) framework.
In February, while presenting the Union Budget FY22, Finance Minister Nirmala Sitharaman said that along with the IDBI Bank, two other state-run banks would be privatised in the next financial year.