IDBI Bank will soon be converted into a private bank. According to a report by CNBC TV18, the government is nearing the finalisation of a share purchase agreement with prospective buyers. The Centre is now preparing to invite financial bids for the bank.
The report further maintained that the share purchase agreement has been cleared by an inter-ministerial group and financial bids are likely to be invited in September.
The government is confident about the timeline of IDBI Bank’s sale and the recent market volatility won’t impact the schedule, people in the know of the matter told NDTV Profit. The government is eyeing Rs 40,000- Rs 50,000 crore from IDBI Bank disinvestment, they added.
The sale of the government’s stake in IDBI Bank, delayed multiple times over the past three years, is considered a key element of its broader divestment strategy. At present, the government and Life Insurance Corporation of India (LIC) jointly own 95 per cent of IDBI Bank, with 60.72 per cent earmarked for sale under the ongoing disinvestment initiative.
Shares of IDBI Bank were up 3.22 per cent at 1:20 pm today at a trading price of Rs 104.50.
A report in March had maintained that the financial bids for the strategic sale of IDBI Bank were expected in May-June after the share purchase agreement (SPA) negotiations concluded. A Financial Express report had maintained that the department of investment and public asset management (DIPAM) received multiple expressions of interest (EOI) on January 7, 2023 for a total of 60.72 per cent stake in the bank, including 30.48 per cent (approx. Rs 23,700 crore at current prices) from the government and 30.24 per cent from promoter LIC, along with the transfer of management control in the bank.
Earlier in April, IDBI Bank had released its fiscal fourth quarter earnings report with a 26 per cent on-year increase in net profit at Rs 2,051 crore. Total income rose to Rs 9,035 crore in the period under review from Rs 7,887 crore in the January-March period of previous fiscal.
