DIPAM Secretary Tuhin Kanta Pandey on Wednesday said the department is working on the Expression of Interest (EoI) and would soon invite preliminary bids from investors for the privatisation of IDBI Bank.
The Cabinet Committee on Economic Affairs gave in-principle approval for strategic disinvestment and transfer of management control in IDBI Bank in May 2021.
Currently, the government holds 45.48 per cent in the bank, and Life Insurance Corporation of India, which is currently the promoter of the bank, owns a 49.24 per cent stake.
"We have been at it for quite some time. It is also a first of its kind transaction where through a bidding route we will be privatising a bank. Both government and LIC put together hold 94 per cent in IDBI Bank," he said while addressing 'FICCI CAPAM 2022 - 19th Annual Capital Markets Conference’.
As the bank has come out of the Prompt Corrective Action (PCA) framework, he said its performance has improved which would generate greater interest among investors.
The RBI in March 2021 removed IDBI Bank from its enhanced regulatory supervision PCA framework after nearly four years on improved financial performance.
"We are working on the Expression of Interest (EoI) and (it) will be issued soon," Department of Investment and Public Asset Management (DIPAM) Secretary said.
The government, along with LIC, will decide on the quantum of stake that they will sell in IDBI Bank before seeking initial bids. The quantum of stake dilution is expected to be outlined in the EoI.
The government has set a target of Rs 65,000 crore from divestment in 2022-23 (April-Mar). It has already raised Rs 24,544 crore, majority of which is contributed by listing of the country's biggest insurer LIC in May this year.
Shares of LIC were listed at discount at Rs 865 to the initial public offering price of Rs 949 per share. Since then, it has been trading below the issue price. Shares of LIC closed at Rs 663.20, down 1.04 per cent on Wednesday.
Speaking about LIC, Pandey said the insurance company is taking a number of steps to improve its topline and bottomline.
"The management is taking post-listing initiatives for eg: re-engineering process to improve 13-month and 25-month consistency where LIC has been relatively less than peers.
LIC has been bringing new professionals in areas like investment relation, Chief Development officer, Chief Technology Officer, cash management, looking into actuarial valuation and regular IEV (Indian Embeded Value) disclosures," he said.
(This story has been published from a wire agency feed without any modifications to the text. Only the headline has been changed.)
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