Centre to meet SEBI officials today on IDBI Bank disinvestment
Sources also say that India-born Canadian billionaire Prem Watsa may evince interest in IDBI Bank.
- Jun 22, 2022,
- Updated Jun 22, 2022 11:01 AM IST
The centre is accelerating its plan on disinvestment of IDBI Bank in the current fiscal year.
Sources tell Business Today Television that a crucial meeting is being held today between senior officials of SEBI and the Department of Investment and Public Asset Management (DIPAM) in New Delhi.
"We have various issues to discuss, especially on minimum public shareholding and exemption of open offers", said a source.
Under the SEBI's minimum public shareholding norms, listed entities with a valuation of over one lakh crore need to have at least 25 per cent public shareholding within five years of listing. The government had last year exempted public sector entities from this norm.
As a public sector bank, IDBI Bank is currently exempted from this SEBI norm, but once it becomes a private bank, it may lose the same.
Centre is also hoping to soon conclude ongoing discussions with the Reserve Bank of India on IDBI Bank.
"We are discussing the structure of dilution, glide path, consortium and maximum public equity that can be offered. Some feedback has been received from investors. We also need a reconciliation on RBI's private bank ownership rules, with the initial lock-in requirements of holding a minimum 40 per cent stake by promoters in private banks." said a source.
The DIPAM is also ascertaining whether the two regulators can arrive at a common timeline of over five years for the strategic investor in IDBI Bank to dilute its stake to comply with the listing norms as well as the RBI rules on promoter holdings in private sector banks.
The government holds a 45.48 per cent stake in IDBI Bank, while LIC holds 49.24 per cent.
"Complete dilution of government stake is not necessary. It will depend on the nature of agreement we have on IDBI Bank. People won't mind if LIC retains some share in IDBI Bank. Our focus is on equity and management control. If at all government retains, it will be in its own financial interest to take the upside," the sources added.
Sources also say that India-born Canadian billionaire Prem Watsa may evince interest in IDBI Bank. Fairfax India Holdings, the investment arm led by Watsa is said to have held initial talks with Finance Ministry officials on the matter.
The centre is accelerating its plan on disinvestment of IDBI Bank in the current fiscal year.
Sources tell Business Today Television that a crucial meeting is being held today between senior officials of SEBI and the Department of Investment and Public Asset Management (DIPAM) in New Delhi.
"We have various issues to discuss, especially on minimum public shareholding and exemption of open offers", said a source.
Under the SEBI's minimum public shareholding norms, listed entities with a valuation of over one lakh crore need to have at least 25 per cent public shareholding within five years of listing. The government had last year exempted public sector entities from this norm.
As a public sector bank, IDBI Bank is currently exempted from this SEBI norm, but once it becomes a private bank, it may lose the same.
Centre is also hoping to soon conclude ongoing discussions with the Reserve Bank of India on IDBI Bank.
"We are discussing the structure of dilution, glide path, consortium and maximum public equity that can be offered. Some feedback has been received from investors. We also need a reconciliation on RBI's private bank ownership rules, with the initial lock-in requirements of holding a minimum 40 per cent stake by promoters in private banks." said a source.
The DIPAM is also ascertaining whether the two regulators can arrive at a common timeline of over five years for the strategic investor in IDBI Bank to dilute its stake to comply with the listing norms as well as the RBI rules on promoter holdings in private sector banks.
The government holds a 45.48 per cent stake in IDBI Bank, while LIC holds 49.24 per cent.
"Complete dilution of government stake is not necessary. It will depend on the nature of agreement we have on IDBI Bank. People won't mind if LIC retains some share in IDBI Bank. Our focus is on equity and management control. If at all government retains, it will be in its own financial interest to take the upside," the sources added.
Sources also say that India-born Canadian billionaire Prem Watsa may evince interest in IDBI Bank. Fairfax India Holdings, the investment arm led by Watsa is said to have held initial talks with Finance Ministry officials on the matter.