Govt may extend bid submission deadline for stake sale in IDBI Bank

January 2023 could be new date following requests from transaction advisor

The government may extend until early January 2023 the deadline for submitting bids for the strategic disinvestment of IDBI bank, said an official. The last date for expression of interest (EOI) submission is December 16.

The deadline could be extended after the Department of Investment and Public Asset Management (DIPAM) received requests from the transaction advisor, said the official.

The government expects to invite financial bids for IDBI in the current financial year close to March 2023, he said. However, the deal is expected to be closed by the middle of the next financial year, as it requires 9-10 months to conclude the transaction.

DIPAM has received 167 queries from at least 9-10 potential serious bidders about the proposed stake sale and transfer of management control in IDBI Bank, indicating a strong interest in the proposed transaction.

The government’s stake in IDBI will be sold in two-stages. In the first, those bidders that meet initial eligibility criteria shall be allowed in the ‘fit and proper’ assessment as prescribed by the RBI. Then they will have to get clearance from the Ministry of Home Affairs.

After that, the qualified bidders would proceed to the second stage where financial bids would be sought.

According to sources, at least three private equity firms, one foreign bank, and a couple of alternative investment funds (AIFs) have sought clarity, apart from some home-grown firms, on the proposed deal and the EOI.

The government, on October 7, invited bids for privatising IDBI Bank. The Centre said it and LIC would sell a cumulative 60.72 per cent stake in the financial institution.