RBI is expediting the assessment of potential candidates to buy a stake in IDBI Bank, aiming to complete the process by the end of October. Two anonymous government sources disclosed this information. The government, currently holding a 45.48% stake, intends to sell a 60.7% stake in collaboration with LIC, which owns a 49.24% stake in the bank. Initial bids were submitted by Kotak Mahindra Bank, CSB Bank, and Emirates NBD.
Government Aims to Conclude IDBI Bank Stake Sale by March
The typical process for the RBI to transfer control of a bank to a new buyer takes 12-18 months. However, the RBI has conveyed to the government that the ‘fit and proper assessment’ process will conclude by the end of October. Once this assessment is completed, the government can invite bids in January-March, potentially concluding the stake sale by the end of March.
IDBI Bank Shares Rise, Outpacing Bank Nifty’s Growth in the Last Year
The government aims to achieve a disinvestment target of Rs 510 billion for the financial year 2023-24, which encompasses the sale of its stake in IDBI Bank. The government’s primary focus is on selling its IDBI Bank stake, raising doubts about meeting the disinvestment target for this financial year. With upcoming elections in sight, the government is concentrating more on electoral matters.
Following the finalization of potential IDBI Bank candidates, the government may grant them access to confidential data, including Employees’ Pension Fund and insurance and medical coverage. IDBI Bank shares witnessed a significant surge on October 12, closing at Rs 71.55, up 3.4%. Over the past year, IDBI Bank shares have risen by over 67%, outperforming Bank Nifty, which gained only 15.47% during the same period.
