The valuation target means the administration is seeking a premium of roughly 33%, based on IDBI Bank’s market value of about $5.8 billion as of Thursday.
Govt is pushing for a valuation of around $7.7 billion for state-owned IDBI Bank in what could be the biggest sale of the government’s stake in a lender in decades. The government earlier this month invited bidders for a 60.72% stake in the Mumbai-listed lender. Bidders could get regulatory approvals and security clearances after November as the process proceeds, according to reports.
The valuation target means the administration is seeking a premium of roughly 33%, based on IDBI Bank’s market value of about $5.8 billion as of Thursday.
IDBI Bank’s improved profitability could support the valuation target, said people familiar with the matter. Potential investors ranging from domestic and foreign banks to non-banking financial companies and private equity funds have expressed initial interest in the asset, sources added.
Government and the state-owned Life Insurance Corp. of India together own about 95% of IDBI Bank. IDBI Bank was penalized by the central bank in 2017 with several restrictions on lending after its bad-loan ratio surged and capital ratios depleted. LIC acquired 51% of the lender in 2019 in a government bailout of the firm. The Reserve Bank of India removed sanctions on the bank last year paving the way for its proposed sale.
