As per a report by Financial Express, The Central Government may within a week approve Canada’s Fairfax Financial Holdings’ bid to acquire a 60.72% stake in IDBI Bank from the government and Life Insurance Corporation of India (LIC). If this happens, it will bring the five-year-old strategic sale process to a close.
Fairfax and Dubai-based Emirates NBD submitted bids earlier but it fell short of governments expectations and the sale process was halted. They again submitted revised bids last month. An in-principle decision has been taken and the timing of the announcement is being worked out, sources told The Financial Express.
The strategic sale was put on hold in early March after financial bids from Fairfax and Emirates NBD fell short of the reserve price. Fairfax, led by billionaire Prem Watsa, has marginally improved its offer in the revised bid.
💡Did You Know? Industrial Development Bank of India or IDBI was established by Government of India as a wholly owned subsidiary of Reserve Bank of India in 1964 to provide financial services to industrial sector.
The Centre and LIC are jointly selling a 60.72% stake in IDBI Bank. The government currently owns 45.48% of the lender, while LIC holds 49.24%. Under the proposed transaction, the government will divest 30.48%, while LIC will sell 30.24%.
If we talk about the shareholding of IDBI Bank, then IDBI Bank has a total promoter holding of 94.71%. Public has the remaining shareholding of 5.29%.
- Promoters: 94.71% (primarily comprising the Government of India and Life Insurance Corporation of India [LIC])
- Public / Retail & Others: ~4.73%
- Foreign Institutional Investors (FII/FPI): 0.45%
- Domestic Institutional Investors (DII): ~0.11%
- Mutual Funds: 0.07%
The Central Government held high-level meetings on July 13 to review the proposed sale of IDBI Bank. Government sources said that the Core Group of Secretaries on Disinvestment (CGD) held two separate meetings on the same day. These meetings focused on matters related to the government’s plan to sell its stake in IDBI Bank.
An Inter-Ministerial Group (IMG) meeting was also held on July 13 to review the strategic disinvestment of IDBI Bank. The meeting was jointly chaired by Sanjay Lohiya, Secretary of the Department of Financial Services (DFS), and Arunish Chawla, Secretary of the Department of Investment and Public Asset Management (DIPAM).
