IDBI Bank privatisation course of kicks off

Kickstarting privatisation course of within the banking sector, the federal government Tuesday invited bids to nominate transactions and authorized advisors to help in strategic sale of its fairness, together with switch of administration management, in IDBI Bank to personal gamers.
Transaction advisor — which could possibly be consulting companies, funding or service provider bankers, and monetary establishments/banks — will undertake duties associated to all facets of proposed strategic disinvestment. It will embrace aiding the federal government on modalities of disinvestment and the timing, structuring the transaction, organizing roadshows for potential buyers, and suggesting measures to fetch optimum worth.
The advisor will assist in negotiations with shortlisted bidders, fixing the vary of truthful reserve worth, and help IDBI Bank in organising of the e-data room that might assist buyers in conducting due diligence, in keeping with the draft request for proposal doc launched by the Department of Investment and Public Asset Management (DIPAM) Tuesday.

“(The advisor will) assist GoI in fixing the range of the fair reserve price considering the valuation of IDBI Bank Limited, based on the methods employed in the financial services sector and highlighting the pros and cons of various methods and also highlighting the fact that many variations of these valuations exist. The GoI will have the option of valuation done from any other agency,” mentioned the RFP doc.

The authorities at present owns 45.48 per cent fairness in IDBI Bank, whereas Life Insurance Corporation has 49.24 per cent stake and remaining 5.29 fairness is held by public shareholders. Public Sector Banks can’t take part as bidders for acquisition of IDBI Bank within the transaction course of, DIPAM has acknowledged. Transactions and authorized advisors must submit their bids by July 13. With the Cabinet clearance in place and legislative provisions in line, IDBI Bank transaction is anticipated to be quicker than the method of privatising two different banks, introduced within the Budget.