The possibility was proposed by a few of the individuals on the roadshows who have been of the view that an all-cash provide for the financial institution would work out to be too pricey.
As many as 18 individuals attended the investor conferences, or roadshows, organised by the advisers to IDBI Bank’s sale course of. They included personal banks, non-bank finance firms and a few native personal fairness funds.
The authorities and state-run Life Insurance Corporation of India collectively maintain 95% of IDBI Bank. Their stake is price about ₹47,500 crore (about $6.2 billion) based mostly on the lender’s market cap of practically ₹50,000 crore on Thursday.
Govt Could have Reservations
However, based on individuals within the know, the federal government might have reservations over a construction that will contain a merger with an present entity, as a result of that will not result in disinvestment and solely lead to its present shares in IDBI Bank being swapped for an additional in a brand new merged entity.
The authorities in that case would stay a shareholder, perhaps at the same time as a fringe one, and that will defeat the aim of getting out of the companies all collectively.
Moreover, in a share-swap deal, the federal government might not instantly get the cash for its stake.
Queries emailed to Department of Investment and Public Asset Management secretary Tuhin Kanta Pandey didn’t elicit a response till press time Thursday.
The authorities had first introduced its plans for the privatisation of IDBI Bank in February 2021 and supposed to finish the method within the fiscal yr ended on March 31, 2022. It subsequently additionally introduced that two different public sector banks might be privatised.
It has but to name expressions of curiosity (EoIs) to formally invite bidders to take part in IDBI Bank’s privatisation course of. The EoI is normally step one within the course of which is adopted by vetting of the functions of the potential bidders and signing of non-disclosure agreements earlier than a proper request for proposal is issued to shortlisted candidates.
The privatisation plans of different government-owned firms, similar to Bharat Petroleum Corp, Shipping Corporation of India and Container Corporation of India have all been working delayed.
