IDBI Bank stake sale process to be delayed yet again

The government is likely to delay the stake sale process of IDBI Bank yet again. CNBC-TV18 has learnt that the government is unlikely to invite expressions of interest (EoI) for the bank in May.

Earlier there was an indication that the government may be in a position to invite the EoI for the stake sale in the month of May. However, it is now given to understand that this process may take up few more weeks to say the least and it could actually be delayed by another three odd months.

It has been understood that the government is trying to reach out to potential buyers and bidders for IDBI Bank stake sale and unless that process is completed and they are not convinced, maybe there could be some delay in calling out for the EoIs.

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Consortia will be allowed to bid for the IDBI Bank stake sale and the government could be thinking of allowing private equity investors to form part of these consortia and in order to incentivize these PE investors, it may be possible that the government could ask Reserve Bank of India (RBI) to relax the 10 percent cap on the banking sector.

LIC has made a strong pitch to the government in order to hold on to some stake in IDBI Bank even post privatization. The government has said very clearly that they will be keeping LIC’s interest in mind while divesting equity and going forward it may be possible that LIC will continue to hold some kind of a stake in IDBI Bank.