IDBI Bank shares settle 5.6% higher following fresh reports on stake sale; check the latest buzz

"The IDBI Bank strategic sale is in the technical evaluation stage," a senior official told PTI.

Amidst the West Asian crisis, the government is banking on disinvestment and asset monetisation to garner resources and create fiscal space for measures to shield the economy from the global uncertainty, officials said, per the PTI report.

After over three years of pursuit, the strategic sale of IDBI Bank had reached the final stage of financial bid, and the government does not want to restart the process again to avoid further delay.

Details to know

The government and LIC were together looking to sell 60.72% of IDBI Bank and had floated an Expression of Interest (EoI) in October 2022. Financial bids came on February 6.

After that, the government set the reserve price for the strategic sale. The financial bids for the IDBI Bank strategic sale, however, came in lower than the reserve price set by the inter-ministerial group on disinvestment headed by secretaries in the finance ministry.

Following that, the strategic sale of IDBI Bank hit a roadblock.

Sources said that the government has now restarted work to take forward the IDBI Bank strategic sale to a logical conclusion.

Prem Watsa-led Fairfax and Emirates NBD are reported to have put in bids for the strategic sale of IDBI Bank.

Current status

Currently, the government and state-owned LIC together hold a 94.71% stake in IDBI Bank. The government owns 45.48%, and LIC holds 49.24% in the lender. Of this, the government and LIC are looking to sell 60.72% in IDBI Bank.

IDBI Bank stake sale: Background

In October 2022, the government and Life Insurance Corporation of India (LIC) had invited an expression of interest (EoI) for selling a 60.72% stake in IDBI Bank. The Centre and LIC look to pare 30.48% and 30.24% stakes, respectively.

In January 2023, the government said it received multiple preliminary bids. Following that, the bids were sent for security clearance from the Ministry of Home Affairs (MHA) and for the 'Fit and Proper' assessment from the RBI.

The shortlisted bidders who received both the clearances later on undertook due diligence of the bank and the government in January and invited financial bids. In February, the government announced that it received financial bids for IDBI Bank.