IDBI Bank stake sale may not be completed this fiscal year: DIPAM secretary
IDBI Bank Ltd may not be completed in the current fiscal year. Pandey said that the transaction is “on course" but there are aspects like the RBI's fit and proper criteria which need to be complied with. “We practically don't think that before March, we can conclude it (IDBI Bank stake sale)," he said.
The Reserve Bank of India (RBI) began the vetting process known as ‘fit and proper criteria’ in April, after Kotak Mahindra Bank, the Prem Watsa-backed CSB Bank and Emirates NBD submitted their initial bid to acquire a majority stake in IDBI Bank. The central bank normally takes about 12-18 months to complete the assessment process before allowing an entity to run a bank. The government, which owns over 45% stake in IDBI Bank, and insurer Life Insurance Corp of India (LIC), which has a 49.24% shareholding, have jointly decided to sell 60.7% stake in the lender.
Shares of IDBI Bank Ltd closed at ₹65.60, down 0.83% on Thursday. Achievement of the divestment target is contingent upon important transactions like the one involving sale of majority ownership in IDBI Bank, said the DIPAM secretary. He also said that there is “some uncertainty" on the share sale of NMDC as well through which the department is expecting to generate over ₹10,000 crore.
On stake sale in Shipping Corporation of India, Pandey said that Maharashtra government recently issued an order exempting stamp duty on an asset transfer transaction which is to precede the sale. “Even if we have to consider fiscal receipts, we must consider whether we should have only disinvestment as a target, or disinvestment and dividend both as a target because money is fungible," the DIPAM secretary said. Milestone Alert!
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