Sinha Clears Us Float By Idbi

Finance minister Yashwant Sinha has given "informal in-principle approval" to Industrial Development Bank of India to float an American depository receipts issue in order to reduce the government's stake in the financial institution.

Senior officials said the approval was received last week when IDBI chairman G P Gupta and the finance minister were at the annual International Monetary Fund meeting in the US. Gupta could not be reached for comments as he was attending an Asian Development Bank seminar in Manila.

In January, the finance ministry had cleared IDBI's proposal to reduce the government's stake in it from 72 per cent to 51 per cent.

 

IDBI officials said the exercise would be completed by the end of this financial year, but could be extended up to May. The FI is considering offloading five per cent of its total equity base to ADR holders.

The IDBI management is considering various other options, including rights, bonus and a preference issue, to reduce the government's stake.

IDBI has already geared up to prepare its balancesheet as per US generally accepted accounting practices. "On pro forma basis, the balance-sheet has been prepared as per the GAAP, but for internal purposes only," an IDBI official said.

Chartered accountants S B Billimoria & Company have been appointed to advise IDBI on adopting the US accounting principles.