Financial bids for the strategic disinvestment of IDBI Bank have been received and will be evaluated as per the prescribed procedure, the Department of Investment and Public Asset Management (DIPAM) under the Union Finance Ministry said on Friday, signalling progress in the government’s plan to sell its majority stake in the lender.“Financial Bids have been received for the Strategic Disinvestment of the IDBI Bank. They will be evaluated as per the prescribed procedure," the FinMin department announced on X. — SecyDIPAM (@SecyDIPAM) ET had reported last night that Toronto-headquartered Fairfax Financial and Kotak Mahindra Bank were expected to submit separate financial bids along with supporting documents for the 60.72% stake held by the government and Life Insurance Corporation of India (LIC). Together, the Centre and LIC own more than 90% of the lender. Both Fairfax Financial and Kotak Mahindra Bank declined to comment.The reserve price for the transaction is to be determined after receipt of the financial bids and before they are opened, and will be known only to a small group of government officials. The price will not be disclosed to bidders. A government official told ET that the reserve price would be based on completed business and asset valuations. Immovable assets such as land and buildings account for roughly 3% of IDBI Bank’s total assets, while the Securities and Exchange Board of India’s open-offer pricing mechanism could also serve as a reference point for setting the reserve price.The disinvestment process, formally launched in October 2022, has faced delays as the government worked through procedural and regulatory requirements to facilitate a potential sale. ET had earlier reported that Fairfax Financial emerged as a frontrunner and that the timeline for financial bids was pushed beyond the February 1 Union Budget.The Union Budget has set a target of ₹80,000 crore from disinvestment and asset monetisation in FY27. In a post-Budget interaction, DIPAM Secretary Arunish Chawla said the IDBI Bank sale had moved into the third phase with technical and financial bids invited, adding that further clarity could emerge before the end of the current financial year.Any successful bidder will require final clearance from the Reserve Bank of India under its ‘fit and proper’ criteria, along with approvals from statutory and regulatory authorities including the Competition Commission of India, and will need to make an open offer to the bank’s minority shareholders.Centre and LIC have also sought approvals to relinquish their promoter status to smoothen the divestment, while the Securities and Exchange Board of India has been approached to exempt IDBI Bank from minimum public shareholding requirements that mandate a 25% free float for listed companies.
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