Since investors are wary of physical meetings due to pandemic fears, the roadshows for IDBI Bank’s strategic disinvestment will be held virtually.
The government will begin roadshows with investors on February 25 in preparation for the strategic disinvestment of IDBI Bank, as the Centre and the Life Insurance Corporation of India (LIC) look to sell their stake in the lender to a private buyer.
The exercise will be used to gauge investor interest as the government prepares to embark on the first-ever strategic disinvestment of a public sector lender (although majorly owned by LIC).
Officials in the know say the roadshows will be held virtually because investors are wary of physical meetings due to pandemic fears. Intermediaries appointed by the Department of Investment and Public Asset Management (DIPAM), KPMG, and Link Legal will manage the roadshows.
The government is considering selling its 45.48 percent stake in the bank. LIC, which owns 49.24%, will also sell its stake in order to give the new buyer management control. The amount of stake dilution by the Centre and LIC will be decided in consultation with the RBI while structuring the transaction. Although the government has yet to finalise its plan for quantum dilution, Business Standard previously reported that discussions have revolved around the government keeping a 26% stake in the lender and both the Centre and the LIC proportionately reducing their stakes in the lender.
Investor outreach will assist in determining the terms of the lender’s sale and structuring the transaction. The Reserve Bank of India (RBI) will be brought on board by the Department of Investment and Public Asset Management (DIPAM) to vet the candidates interested in acquiring IDBI Bank. The RBI may screen bidders as soon as the EoI is submitted, ensuring that only the most qualified investors advance to the next stage.