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- IDBI Bank Stake Sale | Fairfax And Emirates NBD Bid For Government Stake
Mumbai2 hours ago
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The Government of India and Life Insurance Corporation of India together are preparing to sell their 60.7% stake in IDBI Bank. Canada’s Fairfax Financial Holdings and Dubai’s Emirates NBD have submitted bids for this strategic disinvestment, which are currently in the valuation phase. According to government sources, this entire deal can be finalized within the next one month.
Bureaucrats meeting to review the deal
The process of stake sale in the bank is progressing rapidly. Sources said that a panel of bureaucrats had held a meeting on Monday in which a review was done to take this transaction forward. Currently the revised bids of the companies are being examined.
Government and LIC have 94.72% shares
This proposed transaction is an important part of the Central Government’s Strategic Disinvestment Programme. Talking about the current shareholding pattern, the Government of India’s stake in IDBI Bank is 45.48%. Whereas government insurance company LIC holds 49.24% shares of the bank. Together they are selling 60.7% of their total stake.
Two big foreign companies are involved in the race
There are two main contenders in the fray to buy controlling stake in IDBI Bank. The first name among these is that of ‘Fairfax Financial Holdings’, the company of Indian-origin Canadian billionaire Prem Vatsa. The other contender is Dubai’s leading banking group Emirates NBD.
Largest foreign investment in India’s banking sector
According to the current market price, the total value of this proposed acquisition is estimated to be approximately $5.7 billion. According to experts, if this deal is completed, it will be one of the largest foreign investments ever in the history of India’s banking sector.
Processes can be completed within a month
Government sources told news agency ANI that the valuation process is progressing continuously. After completion of all the necessary and prescribed processes, the stake sale process is expected to be finalized within the next one month.
IDBI Bank shares rose 3% amid the news
IDBI Bank shares saw a rise today amid news related to this disinvestment process. The bank’s shares closed at Rs 86.48 per share with a gain of 3%.
What is strategic disinvestment?
When the government sells a major part (50% or more) of its stake in a government company or bank to a private or external company and also hands over the management control of that company to the buyer, it is called strategic disinvestment. Its objective is to promote private investment and work efficiency in government companies.
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