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LIC's holding in IDBI Bank to be sold along with govt's stake: DIPAM

LIC's holding in IDBI Bank would be sold along with the government's stake in the lender's disinvestment, but the exact quantum of stake dilution is yet to be decided, the DIPAM has said.

LIC  | IDBI Bank | Dipam

Press Trust of India  |  New Delhi 

Life Insurance Corporation of India, LIC

LIC's holding in would be sold along with the government's stake in the lender's disinvestment, but the exact quantum of stake dilution is yet to be decided, the Department of Investment and Public Asset Management (DIPAM) has said.

The central government and together own more than 94 per cent equity of .

LIC, currently having management control, has 49.24 per cent stake, while the Government of India holds 45.48 per cent. Non-promoter shareholding stands at 5.29 per cent.

The Cabinet in May had approved the strategic sale of the entire stake of the government and Life Insurance Corporation (LIC) in Ltd.

In response to queries received from potential transaction advisors, the has clarified that since LIC's stake would be sold along with that of the government's, a single transaction advisor would manage the entire share sale process.

"The mandate received from CCEA is to off-load upto 100 per cent stake of GoI and alongwith transfer of management control. However, the exact quantum is yet to be worked out. It will be determined, as we go through the transaction and ascertain investors' interest, market appetite etc.

"It is clarified that LIC's stake will be sold alongwith GoI's shareholding in this transaction. So there is only one transaction advisor," it said.

The quantum of stake dilution would be declared before RFP (Request for Proposal) stage of the transaction, it added.

The had last month invited bids from transaction advisors and legal firms for managing and advising on the strategic sale and transfer of management control in IDBI Bank.

As per the eligibility criteria outlined, the bidders should have advised at least one transaction of strategic disinvestment/ strategic sale/ M&A activities/ private equity investment transaction of the size of Rs 5,000 crore or more during the period from April, 2016 to March, 2021.

Insurance giant had acquired controlling stake in IDBI Bank in January 2019.

Finance Minister Nirmala Sitharaman in her Budget for 2021-22 had said the process of privatisation of IDBI Bank would be completed in the current fiscal.

The government aims to mop up Rs 1.75 lakh crore in the current fiscal from minority stake sale and privatisation.

Of the Rs 1.75 lakh crore, Rs 1 lakh crore is to come from selling government stake in public sector banks and financial institutions, while Rs 75,000 crore would come as CPSE disinvestment receipts.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Fri, July 09 2021. 22:07 IST