Government will sell 26% stake in this bank, the management of the bank will go to private hands – News18

Mumbai . The central government has started the process of reducing its stake in IDBI Bank. In view of this, the government has issued a request for proposals (RFP) to appoint transaction and legal advisors to advise on the sale of its stake in the bank. Interested firms or companies can apply for this by July 13.

Sources related to this matter told Moneycontrol that the central government is planning to sell at least 26% stake in IDBI Bank. If the government sells 26% stake, then the control of the management of this bank will go to private hands. The official said that the total stake of the government in IDBI Bank is 45.5%.

This time RPF is different from before

However, this time the RPF is quite different from before, because it has not been mentioned in it how much stake the government will sell in IDBI Bank. Earlier RFPs, whether for appointment of consultants or for obtaining bids, clearly mentioned how much stake the government or company wanted to sell.

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But in the case of IDBI Bank, the government has not yet decided how much stake it will sell. The official told Moneycontrol that the decision on how much stake the government will sell will be taken after consultation with RBI, LIC and the company or firm that will be appointed as the transaction advisor.

LIC is the second major shareholder of IDBI
The official said that in the previous RFPs, the stake of government non-financial companies was sold, but in the case of IDBI Bank, apart from RBI, the second major shareholder of IDBI is LIC. The official said that only preliminary talks have taken place on how much stake is to be sold. A decision on this issue will be taken after the appointment of the Transaction Advisor.

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The official said that the government is planning to sell at least 26% stake so that the control of the bank’s management goes to private hands. The government may also sell its entire stake in IDBI Bank to meet the disinvestment target for FY22. Let us tell you that the government has 45.5% stake in IDBI Bank, LIC’s stake is 49.24% and non-promoter shareholding is 5.29%.

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