The central government has started the process of selling its stake in IDBI Bank. The government will soon appoint an asset valuer for IDBI Bank. For this, the government has invited bids from interested parties. Bids for this can be made till October 9.
Work is going on as per the plan
According to the government document, the asset valuer to be selected will have to evaluate the assets of the bank. And assistance will have to be provided throughout the entire sales process. Earlier in a Mint news, it was claimed that the government may postpone the possible sale of its stake in IDBI Bank to the next financial year. However, from the latest step it seems that the government is following the old plan.
This is the government’s plan
The government plans to provide financial assistance to IDBI Bank by December. Bids should be issued and IDBI Bank should sell its stake by the fourth quarter of the current financial year i.e. by March 2024. The process for this had also started in July. Now the process of appointment of asset valuer has been taken forward.
Expectation of approval from RBI soon
Department of Investment and Public Asset Management i.e. DIPAM is handling the work of this strategy sale. Since this strategic sale is related to a bank, the seal of the Reserve Bank is necessary on it. Currently, the proposed sale of government’s stake in IDBI Bank has not received the approval of the Reserve Bank. It is being said that talks are going on with the Reserve Bank and approval can be given soon.
In this way the deal becomes attractive
Government’s direct investment in IDBI Bank. The stake is 49 percent, while 51 percent stake is with the government insurance company Life Insurance Corporation of India. Seen this way, technically IDBI Bank is no longer a government bank but a private sector bank. Apart from this, to make the deal more attractive, the government has also allowed foreign funds to hold more than 51 percent stake in IDBI Bank.
Proposed deals of this financial year
The government hopes to raise Rs 15 thousand crore by selling its stake in IDBI Bank. In this financial year, the government has set a target of raising Rs 51,000 crore through disinvestment. Apart from IDBI Bank, privatization of companies like Shipping Corporation of India, NMDC Steel, BEML, HLL Lifecare, Container Corporation of India and Vizag Steel is proposed.
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