Many steps have been taken by the government to improve the banking system in the country. The government is once again going to privatize another bank (bank privatisation latest news). Let us tell you that the bids for the privatization of IDBI Bank are likely to be invited by March. At the same time, the process of selling it can be done in the next financial year. Officials have given this information.
Government sold stake
The government had last week invited bids from potential investors to privatize the bank by selling a total of 60.72 per cent stake in IDBI Bank. For this, the last date for submission of bids or Expression of Interest (EoI) has been fixed as December 16, 2022.
Takes 6 months
Eligible bidders will be provided access to the ‘Data Room’ after approval of the ‘Fair and Appropriate’ appraisal of the EoI and interested applicants by the Reserve Bank of India (RBI) and security clearance from the Ministry of Home Affairs. Officials said it usually takes around six months to complete the process and receive the financial bids. We look forward to inviting financial bids for IDBI Bank by March.
Process will end soon
Officials have said that this will be the first case of strategic sale in the bank, so a lot of questions are also expected to arise during the process. According to officials, the process of strategic sale of IDBI Bank is likely to end by September.
How much is the stake?
The potential investor should have a minimum net worth of Rs 22,500 crore to apply. Also, to be eligible for bidding, the company must be in a net profit in three of the last five years. Life Insurance Corporation of India (LIC) currently holds 49.24 per cent stake in IDBI Bank with 529.41 crore shares while the central government holds 45.48 per cent stake with 488.99 crore shares.
How much is the combined stake of LIC and the government?
At the same time, after the stake sale, the combined stake of LIC and the government in the bank will come down from 94.72 per cent to 34 per cent. The government will sell its 30.48 percent and LIC 30.24 percent stake in this bank. The holding of both together constitutes 60.72 per cent of the equity share capital of IDBI Bank.
The target is to raise Rs 65,000 crore
The Reserve Bank of India had classified IDBI Bank as a private sector bank with effect from January 21, 2019, after LIC acquired 51 per cent of the total paid-up equity share capital of the bank. Significantly, the government has set a target of raising Rs 65,000 crore from disinvestment in the financial year 2022-23, out of which it has already raised Rs 24,544 crore.