New Delhi: 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, sources said.
“The IDBI Bank strategic sale is in the technical evaluation stage,” a senior official said.
Amidst the West Asia crisis, the government is banking on disinvestment and asset monetisation to garner resources and create fiscal space for measures to shield the economy from the global uncertainty, officials said.
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.
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 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.
In January 2023, the government said it received multiple preliminary bids. Following that, the bids were sent for security clearance from the Ministry of Home Affairs (MHA) and for the ‘Fit and Proper’ assessment from the RBI. The shortlisted bidders who received both the clearances later on undertook due diligence of the bank, and the government, in January, invited financial bids. In February, the government announced that it received financial bids for IDBI Bank.