Government and Life Insurance Corporation (LIC) together may sell up to 65 percent stake in IDBI Bank and the government hopes to complete this by the next fiscal.
The process may start with 51 percent odd, as these majority shareholders will have to do a basic benchmark in terms of ceding ownership in the bank. They may then go up to 65 percent, which means LIC and government could be left with up to 35 percent odd stake.
Given the current state of affairs, the expression of interest (EOI) has yet to come out and a certain process has to be followed.
CNBC-TV18 has learnt that the government is looking at August-September as a target for the EOI for the IDBI Bank stake sale. If that happens, then clearly 9 to 12 months timeline is left for the government to actually wrap up the transaction.
Discussions with RBI are still ongoing and it may just be possible that private equity investors may be given a majority play in the IDBI Bank disinvestment process. More details will come out in the EOI.
The 15-year timeframe for the glide path of promoter ownership is the central focus here.
Also Read: IDBI Bank and BEML remain on divestment priority list even as markets make the government jittery
The overall pace of disinvestment is likely to remain sluggish and the government will focus primarily on offloading stakes in already decided companies like IDBI Bank and BEML.
Earlier this month, the government said it has completed the strategic disinvestment of Odisha-based Neelachal Ispat Nigam Ltd (NINL) to Tata Steel Long Products Ltd (TSLP).
(Edited by : Abhishek Jha)
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