IDBI Bank: A dilemma of 'parallel sales' in the Indian financial sector

A buyer of the government's stake will have to contend with simultaneous market sales by the other major shareholder, LIC

In another era, the strategic sale of IDBI Bank would have attracted a lot of interest for the treasure trove of information it contains on the Indian financial sector. Not anymore. Now, there will be a different sort of interest in this sale — specifically, the game the strategic investor may have to play in the market to win this trophy.

Here’s why. In January 2019, LIC, India’s largest insurance company, had bought a majority 51 per cent stake in the bank by buying an additional 44 per cent stake to its existing holding of seven per cent. At present the