The authorities presently owns a forty five.48 per cent stake in IDBI Bank, whereas LIC owns 49.24 per cent controlling stake within the lender.
The DIPAM assertion comes after media studies mentioned that the Union authorities might defer the $4-billion IDBI Bank privatisation on account of market volatility
The Department of Investment and Public Asset Management (DIPAM) on Friday rubbished media studies on the deferment of IDBI Bank disinvestment. It mentioned “the transaction continues to be on observe as per the outlined course of”.
“Reports appearing in a section of the media indicating the possibility of deferment of IDBI Bank disinvestment are misleading, speculative and baseless. The transaction continues to be on track as per the defined process in post-EoI stage following receipts of multiple EoIs,” the DIPAM Secretary mentioned in a tweet.
Reports showing in a piece of the media indicating the potential of deferment of IDBI Bank disinvestment are deceptive, speculative and baseless. The transaction continues to be on observe as per the outlined course of in post-EoI stage following receipts of a number of EoIs. pic.twitter.com/HL8a1Xc3H5— Secretary, DIPAM (@SecyDIPAM) March 17, 2023
The DIPAM assertion comes after media studies mentioned that the Union authorities might defer the $4-billion IDBI Bank privatisation plan over considerations that the unprecedented market volatility might deter potential patrons.
The Centre is seeking to divest 30.48 per cent stake, whereas Life Insurance Corporation (LIC) will divest 30.24 per cent within the financial institution. The authorities presently owns a forty five.48 per cent stake in IDBI Bank, whereas LIC owns 49.24 per cent controlling stake within the lender.
The authorities has additionally obtained a number of bids for a majority stake in IDBI Bank. The authorities had on October 7 invited bids for the EoI of IDBI Bank with the deadline of December 16. The final date was later prolonged until January 7.
Earlier this yr, markets regulator Sebi allowed the federal government’s shareholding in IDBI Bank to be reclassified as “public” after its stake sale on condition that its voting rights do not exceed 15 per cent. Reclassification of the government’s remaining 15 per cent shareholding in IDBI as “public” will make the duty of assembly the mandated 25 per cent minimal public shareholding norm less complicated for the brand new purchaser.
The authorities’s intent to reclassify its shareholding as “public” must be specified in the offer document at the time an open offer is made by the new acquirer of the lender, Sebi said.
In 2019, the state-owned life insurer infused Rs 21,624 crore into the bank. LIC is currently the promoter of IDBI Bank with Management Control and the government is the co-promoter.
On December 19, 2020, IDBI Bank was reclassified as an associate company due to the reduction of LIC shareholding to 49.24 per cent following the issuance of additional equity shares by the bank under a qualified institutional placement.
In Union Budget 2021, the Centre had announced a target of Rs 1.75 lakh crore from stake sale in public sector companies and financial institutions, including two PSU banks and one insurance company in FY22.
Following this, in May 2021, the Union Cabinet gave its approval for the strategic divestment and transfer of management control in IDBI Bank.
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