The centre’s disinvestment goals for fiscal 2023-24 have encountered substantial obstacles, primarily due to global geopolitical tensions. Data suggests that only Rs 8,000 crore in disinvestment receipts have been collected so far this fiscal, representing a mere 16 per cent of the targeted Rs 51,000 crore for the full year.
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The planned sale of IDBI Bank stake sale has been delayed due to various reasons including compliance with the Reserve Bank of India’s (RBI) ‘fit and proper’ criteria. Sources suggest that the overall dampened global geopolitical and ongoing tensions with Canada could pose additional challenges for potential bidders.
“Typically, the regulatory process for the ‘fit and proper’ assessment takes approximately 16 to 18 weeks. However, due to the unique nature of this transaction, it is expected to extend beyond this timeline,” an official said.
The RBI initiated the ‘fit and proper’ vetting process in April, after initial bids were submitted by Kotak Mahindra Bank, the Prem Watsa-backed CSB Bank from Canada and Emirates NBD to acquire a majority stake in IDBI Bank.
The government aims to divest a 60.72 per cent stake in IDBI Bank, with 30.48 per cent owned by the government and 30.34 percent by LIC.
Besides IDBI Bank, the government is grappling with challenges in divesting its stakes in CONCOR and the Shipping Corporation of India, further impacting the overall disinvestment revenue.
As per sources, financial bids for a majority stake in Chhattisgarh-based NMDC Steel (NSL), a subsidiary of the centre-owned miner NMDC, have been postponed until 2024. The 50.72 per cent stake is anticipated to fetch a minimum of Rs 11,000 crore for the government.
Despite falling short of the disinvestment target, the government has managed to collect dividend receipts totalling Rs 18,645 crore, raising the total disinvestment receipts to Rs 26,645 crore.
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The centre is hopeful that shortfalls in disinvestment proceeds would be mitigated by healthy bank dividends and the Reserve Bank of India’s dividend.
