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The government will start roadshows with investors for the strategic disinvestment of IDBI Bank from February 25 as the Centre and Life Insurance Corporation of India (LIC) look to sell their stake in the lender to a private buyer.
The preliminary interest of investors will be gauged from the exercise as the government looks to undertake the first-ever strategic disinvestment of a public sector lender (although majorly owned by LIC).
The roadshows will be held virtually as investors are not keen on physical meetings due to pandemic fears, officials in the know said. The roadshows will be managed by intermediaries appointed by Department of Investment and Public Asset Management (DIPAM), KPMG and Link Legal.
The government is looking to sell its 45.48 per cent shareholding in the lender. LIC, which owns 49.24 per cent, will also offload its stake to transfer management control to the new buyer. The quantum of stake dilution by the Centre and LIC will be decided while structuring the transaction, in consultation with the RBI. Although the government is yet to finalise its plan on quantum dilution, discussions have involved retaining 26 per cent stake in the lender and both Centre and LIC proportionately reducing their shareholding in the lender, Business Standard had earlier reported.
The investor outreach will help in setting conditions for the sale of the lender, and structuring the transaction. The Department of Investment and Public Asset Management (DIPAM) will bring Reserve Bank of India (RBI) on board to vet the candidates interested in acquiring IDBI Bank. The RBI may screen bidders as early as when the EoI is placed so that only those investors who meet fit and proper criteria move on the next stage.
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