- Government prefers continuing existing IDBI Bank disinvestment bids over scrapping them
- A high-level meeting discussed options to revive momentum in the stake sale process
- Valuation is being re-evaluated by excluding temporary market volatility effects
The government is not in favour of scrapping existing bids for the disinvestment of IDBI Bank and is instead exploring ways to move forward with the current process, sources told NDTV Profit.
The issue was discussed in a high-level meeting chaired by the Cabinet Secretary on Monday, where multiple options were deliberated to revive momentum in the long-pending stake sale.
According to sources, the government is keen to proceed with existing bids but is simultaneously re-evaluating key aspects of the transaction, particularly valuation. Departments involved in the process have pushed for factoring in the “unaffected” market price, essentially stripping out temporary volatility, to arrive at a fair valuation.
ALSO READ: IDBI Bank Divestment: Government May Seek Fresh Bids As Top Officials Meet
LIC Buyout Option Under Consideration
Among the options discussed, one possibility being explored is for Life Insurance Corporation of India to acquire the government's proposed 30.48% stake in IDBI Bank.
LIC is already the largest shareholder in the bank, holding a 49.24% stake, while the government owns 45.48%. The current disinvestment plan involves selling a combined 60.72% stake, including both government and LIC holdings, to a strategic buyer.
Officials indicated that a final decision on the way forward is likely to be taken once market conditions stabilise. The recent volatility, partly driven by global geopolitical tensions and rising crude prices, has weighed on valuations and investor sentiment.
The government's approach suggests a balancing act—ensuring that the disinvestment process is not derailed while also safeguarding value for stakeholders.
Shares of IDBI Bank closed 0.6% lower at Rs 69.64 on the NSE, compared to a 0.68% advance in Nifty 50. The stock is down 35% year-to-date.
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