New Delhi: The government has received multiple Expressions of Interest (EOI) for the strategic disinvestment of the stake held by it and the Life Insurance Corporation of India (LIC) in IDBI Bank.
The transaction is expected to now move to the second stage, according to the tweet on Saturday from the Secretary, Department of Investment and Public Asset Management (DIPAM), Ministry of Finance.
Multiple Expressions of Interest received for the Strategic Disinvestment of Govt and LIC Stake in IDBI Bank. The transaction will now move to the second stage. pic.twitter.com/dloieEQC9i
— Secretary, DIPAM (@SecyDIPAM) January 7, 2023
The government and LIC are aiming to sell 60.72 per cent of IDBI Bank for which it had invited bids from potential buyers in October. The deadline for submitting Expression of Interest (EoI) or preliminary bids was set as December 16 but later extended to January 7.
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The bids come amid market regulator Securities and Exchange Board of India (Sebi) accepting the government’s request to reclassify its shares in IDBI Bank as “public” after the stake sale as per the regulatory filing by IDBI Bank on January 5. In its filing, IDBI Bank attached a letter received from the Securities and Exchange Board of India (SEBI) dated January 3, 2023.
According to the letter, SEBI has accepted reclassification on a few conditions. SEBI said that the government’s voting rights would have to be capped at 15 per cent, the government would not exercise any control over the affairs of the bank, and it will not be represented on its board of directors.
“The intention of Gol to get its shareholding re-classified as public holding shall be specified in the letter of offer dispatched to the shareholders of IDBI Bank in connection with the open offer made by the new acquirer,” Sebi’s said.
The government’s decision to permit foreign funds and investment entities registered outside of India to control more than 51 percent of IDBI Bank has further made the terms and conditions of the transaction more attractive.
In order to reach its divestment goal of Rs 65,000 crore in FY23 (April–March), the Centre has so far raised roughly Rs 31,100 crore.