This government bank is about to be sold, LIC has a big stake, know who is in the race to buy it

New Delhi: The way has been cleared for privatization of government sector IDBI Bank. According to media reports, three potential buyers have received fit and proper certificates from RBI. These include Fairfax Financial, Emirates NBD and Kotak Mahindra Bank, the company of Indian-origin Canadian banker Prem Vats. Fairfax Financial is considered to be at the forefront of this race. Now everyone’s eyes are on the government. IDBI Bank has been in the privatization list of the government for many years. The government holds 45.5% stake in IDBI Bank. Also LIC is the largest shareholder in the bank with more than 49% stake.

IDBI was first a financial institution which later became a bank. According to the plan, the government can sell 60.7% stake in the bank. This includes 30.5% of the government and 30.2% of LIC. The market cap of IDBI is currently around Rs 1,08,814.31 crore. Experts say that there should be no problem in privatization of IDBI Bank because it is a private entity. The reason for the increase in the government’s stake in this is that the government had to infuse capital into it to recover from the huge losses due to debt.

What will happen next

Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kant Pandey had recently said in an interview that the strategic sale of IDBI Bank is expected to be completed this year. He said that the Reserve Bank is examining the shortlisted bidders on the parameters of fit and proper. After this, bidders will be given exclusive information of IDBI Bank in the virtual data room so that they can do due diligence. This strategic sale is expected to be completed in this financial year.