The Indian government has taken a significant step toward divesting its stake in IDBI Bank by inviting bids to select an asset valuer for the bank. The chosen asset valuer will be responsible for assessing the bank’s assets and facilitating the government’s stake sale in IDBI Bank. The Department of Investment and Public Asset Management (DIPAM) has issued a public notice representing the government’s interest in this matter.
Government’s Stake Divestment
LIC, the Life Insurance Corporation of India, also holds a stake in IDBI Bank. To proceed with this process, a reputable asset valuer firm registered with the Insolvency and Bankruptcy Board of India (IBBI) will be chosen.
DIPAM’s Strategic Move
DIPAM has expressed its intention to engage the services of a well-established asset valuer company on behalf of both the government and LIC. DIPAM Secretary Tuhin Kanta Pandey explained that appointing multiple advisors, including asset valuers, is a standard procedure in strategic investment cases. Requests for Proposals (RFP) have been issued for this purpose, and companies interested in becoming asset valuers must submit their bids by October 9, 2023.
As of March 31, 2023, LIC held a 49.24 percent stake in IDBI Bank, while the government possessed a 45.48 percent stake. The government plans to sell its 30.48 percent stake in IDBI Bank, aligning with LIC’s intention to divest its 30.24 percent stake. This combined effort will result in the sale of a total 60.72 percent stake in IDBI Bank, accompanied by the transfer of management control.
