Life Insurance Corporation of India is likely to pare stake to below 20 percent in the IDBI Bank divestment offer. Both government and LIC together may offload approximately 60 percent in the sale offer, sources told CNBC-TV18.
The government and LIC own nearly 94 percent of IDBI Bank. While the Centre owns 45.48 percent stake, LIC held 49.24 percent as of June 30, data has shown.
At 1:43 pm, shares of IDBI Bank were trading at Rs 42, up by 0.4 percent from the previous close on the BSE.
The government will seek the Reserve Bank of India's (RBI) due diligence at every stage in the divestment process.
There is no cap on promoter holding subject to submission of a plan to reduce stake in 15 years. However, the 26 percent voting rights cap stays for the divestment.
In Budget 2021, the Government of India announced its intention to exit IDBI Bank. The disinvestment strategy refers to the sale or liquidation of government-owned assets.
Governments use disinvestment to reduce their fiscal burdens and raise money for public needs. They may also be done to privatise the assets.
The IDBI Bank stake sale has seen multiple ups and downs, and the process has been delayed by months. Initially, the government planned to invite EoI in May, however, the process got delayed with its attempt to try to reach out to potential buyers and bidders.
(Edited by : Nishtha Pandey)
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