NEW DELHI: The Department of Investment and Public Asset Management (DIPAM), which comes under the Ministry of Finance on Friday, invited expression of interest (EoI) for the strategic sale of IDBI Bank.
The government will dilute its 30.48% shareholding in the bank, while LIC will sell its 30.24% stake, as per the preliminary information memorandum. The management control will also be transferred to the potential buyer. The last date for submission of EoI is December 16.
For submitting the EoI, an interested party should have a minimum net worth of Rs 22,500 crore, as per the latest audited financial statement. In addition, it must report net profit in three out of the last five years to be eligible for bidding. Maximum four members are allowed to bid in consortium. The successful bidder will have to mandatorily lock-in at least 40% of the equity capital for five years from the date of acquisition, as per the government.
The Reserve Bank of India would select the qualified interested parties and decide on the amount of equity stake such entities would hold in IDBI Bank. The banking regulator would do the ‘Fit and Proper’ assessment.
The government and LIC collectively hold 94.72% stake in IDBI Bank. While LIC has 49.24% stake in IDBI Bank, the government holds 45.48% of the shares. Public shareholders hold 5.2% stake in the bank. Post stake sale, LIC and the government’s shareholding in the bank would come down to 34%. Based on the current share price of IDBI Bank (`43), the government and LIC would together fetch Rs 26,000 crore from the stake sale.
The successful bidder will have to make an open offer to the public shareholders of IDBI Bank and will be required to put in escrow, in cash, the entire consideration payable under the open offer assuming full acceptance of the open offer, as per the EoI.
