The Privatisation process of IDBI Bank may start again. The process was paused due to low bid price received from buyers.
As per latest reports, the government may ask for revised financial bids from two potential buyers of IDBI Bank as their original bid amounts were lower than the reserve price fixed for the strategic sale of the lender.
“The IDBI Bank strategic sale is in the technical evaluation stage,” a senior official told PTI.
Amidst the Iran-Israel war, the government is thinking again about disinvestment and asset monetisation to garner resources and create fiscal space for measures to shield the economy from the global uncertainty, officials said.
The Government of India is planning to take measures to save the economy from the effects of Iran-Israel war. The government is planning to launch a new credit scheme worth more than Rs 2 lakh crore. This scheme will be similar to the Emergency Credit Line Guarantee Scheme (ECLGS) that was introduced during the Covid-19 period to help businesses.
The government is also considering a plan to give a loan moratorium of three to six months to reduce financial stress on businesses affected by the Iran war, according to sources.
The Delhi government has signed an agreement (MoU) with the Credit Guarantee Fund Trust for Micro and Small Enterprises to provide collateral-free loans up to ₹10 crore to micro and small businesses (MSEs).
After over three years of pursuance, the strategic sale of IDBI Bank had reached the final stage of financial bid, and the government does not want to restart the process again to avoid further delay.
The government and LIC were together looking to sell 60.72 per cent in IDBI Bank and had floated an Expression of Interest (EoI) in October 2022. Financial bids came on February 6.
After that, the government set the reserve price for the strategic sale. The financial bids for the IDBI Bank strategic sale, however, came in lower than the reserve price set by the inter-ministerial group on disinvestment headed by secretaries in the finance ministry. Following that, the strategic sale of IDBI Bank hit a roadblock and the process was paused.
Sources said that the government has now restarted work to take forward the IDBI Bank strategic sale to a logical conclusion.
Prem Watsa-led Fairfax and Emirates NBD are reported to have put in bids for the strategic sale of IDBI Bank. Currently, the government and state-owned LIC together hold a 94.71 per cent stake in IDBI Bank. The government owns 45.48 per cent, and LIC holds 49.24 per cent in the lender. Of this, the government and LIC are looking to sell 60.72 per cent in IDBI Bank.
In October 2022, the government and Life Insurance Corporation of India (LIC) had invited Expression of Interest (EoI) for selling 60.72 per cent stake in IDBI Bank. The Centre and LIC look to pare 30.48 and 30.24 per cent stake, respectively.
