Divestment-bound IDBI Bank shares slumped nearly 5 per cent to touch an intraday low of Rs 35.1 per share on the BSE during Monday’s trading session. The government may invite preliminary bids for privatising the state-owned public sector bank by July end, an official said, as per a PTI report.
“We may need one more round of discussion with RBI on IDBI strategic sale. The expression of interest (EoI) may be invited by July-end,” the official said. The government holds a 45.48 per cent stake in the bank, while LIC owns 49.24 per cent.
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The official said while the quantum of stake dilution of both the government and LIC is yet to be decided, the management control in IDBI Bank will be transferred in the strategic sale.
The stock is trading near its 52-week low of Rs 32.4 per share touched on May 26, 2022.
At around 01:15 PM, it was down over 4 per cent to Rs 35.1 per share as compared to a 2.8 per cent fall in the BSE Sensex. The scrip in the last six months has been corrected over 32 per cent against over 9 per cent fall in the benchmark index.
The PSU bank’s divestment may have a direct benefit to Life Insurance Company as it is being the one of the majority shareholders in the bank and likely to sale some stakes in the bank. LIC has been called to bail out several PSU banks in the past and it had to take a majority stake in IDBI Bank too.
The Cabinet Committee on Economic Affairs had given in-principle approval for strategic disinvestment and transfer of management control in IDBI Bank in May last year.
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Necessary amendments to the IDBI Bank Act have already been made through the Finance Act 2021, and transaction advisors have been appointed.
