 "Better protection for depositors and investors was one of the chief considerations in Union Finance Minister Nirmala Sitharaman introducing, on Friday, the Banking Laws (Amendment) Bill, 2024, in the Lok Sabha to amend four pieces of legislation.")
India has invited bids to appoint merchant bankers and legal advisers to sell the government's minority shareholding in select public sector banks and financial companies.
The government is looking to undertake minority stake sales in state-run banks and financial firms through an offer for sale, according to a document published on Monday on the Department of Investment and Public Asset Management's website, which did not name the lenders.
The federal finance ministry is looking dilute minority shareholdings in Central Bank of India, Indian Overseas Bank, UCO Bank, and Punjab and Sind Bank, Reuters reported in November.
The plan to lower the government's stake in banks and financial companies is required to comply with public shareholding norms mandated by the markets regulator.
The Securities and Exchange Board of India requires companies to maintain a 25 per cent public shareholding, but has exempted government-owned firms from meeting these norms till August 2026.
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The Indian government owns more than 93 per cent in Central Bank of India, 96.4 per cent in Indian Overseas Bank, 95.4 per cent in UCO Bank and 98.3 per cent in Punjab and Sind Bank. It also owns an 80 per cent stake in Bank of Maharashtra.
In the past, public sector banks launched qualified institutional placements (QIP) to raise capital, which, in turn, reduced the government's stake in state-run banks.
Merchant bankers and legal advisers will be appointed for three years and are required to submit their bids by March 27, the document said.
India has ditched its ambitious privatisation plans and put on hold a majority stake sale in at least nine state-owned units after opposition from relevant ministries.
Instead, it is continuing with minority stake sales in state-run companies. As of February, the government mopped up Rs 8,625 crore ($993.2 million) via stake sales in the 2024-25 financial year.
(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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