Shares of IDBI Bank surged 6 per cent on Wednesday in early trade as the government took a step ahead for the strategic stake sale in the lender.
The government invited bids from transaction advisors and legal firms for assisting in the strategic sale. The Cabinet had in May given in-principle approval for IDBI Bank’s strategic disinvestment along with transfer of management control.
Shares of IDBI Bank surged 6 per cent to Rs 40.90 on Wednesday. The counter was trading at 39.95 at 9.40 am. BSE Sensex was trading 104.76 points or 0.20 per cent higher at 52,693.47 at the same time. The counter settled at Rs 38.60 on Tuesday.
The central government and LIC together own more than 94 per cent equity of IDBI Bank. LIC, currently having management control, has 49.24 per cent stake, while the government holds 45.48 per cent. non-promoter shareholding stands at 5.29 per cent.
The last date for submission of bids by both transaction advisor and legal advisors is July 13, the Department of Investment and Public Asset Management (DIPAM) said.
Insurance giant LIC had acquired controlling stake in IDBI Bank in January 2019. Finance Minister Nirmala Sitharaman in her Budget for 2021-22 had said the process of privatisation of IDBI Bank would be completed in the current fiscal.
Shares of the lender have underperformed in the last month. IDBI Bank has jumped merely 3 per cent, compared to a 4 per cent rise in BSE Sensex during the period. The counter is up by 28 per cent in 2021 so far.
The government aims to mop up Rs 1.75 lakh crore in the current fiscal from minority stake sale and privatisation.
Source: Economic Times