IDBI Bank privatisation at very advanced stage, several administration issues to be sorted for SCI disinvestment: DIPAM Secy 

The privatisation of IDBI Bank is at a very advanced stage and the government will soon move to the next step of the exercise and undertake due diligence soon. 

“IDBI Bank transaction is at a very advanced stage. We will move to the new stage of due diligence in anytime,” said Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM). The Reserve Bank of India is likely to complete assessment of potential bidders on “fit and proper” criteria soon, he told Business Today. 

The Centre and the Life Insurance Corporation of India (LIC) will be offloading 61 percent stake in the bank, which comprises of 30.48 percent stake of the Government of India and 30.24 percent of LIC. The process of the lender’s privatisation had begun in January 2023 when the Centre had issued an Expression of Interest and it is expected to be completed this fiscal. 

The Union Budget 2024-25 has estimated raising Rs 50,000 crore from “miscellaneous capital receipts”, which will be a mix of asset monetisation and disinvestment, Pandey said, but indicated that the target may be reviewed based on the strategy and actual transactions that take place. 

Pandey said the government is also looking to offload stake in Hindustan Zinc but it will be done in “small tranches”. 

“We are trying to sell our minority stake in tranches. We are engaging with market players through our investment bankers. Some more roadshows may be undertaken and we will move forward as soon as we get a sense of the quantum,” he said. 

The Centre holds 29.54 percent stake in Hindustan Zinc while Vedanta holds 64.92 percent equity in the company. 

The DIPAM Secretary underlined that there has been no change in the government’s strategy on disinvestment and it will continue as outlined in the Interim Budget. He also referred to the Finance Minister Nirmala Sitharaman’s statement and said that all decisions by the Cabinet will be honoured but the pace and timing will be decided by the government. 

“Value creation is at the core of the job, and the disinvestment strategy should be more calibrated and should be subservient to that rather than an end in itself. We are also trying to slightly de-link it from the fiscal deficit management approach and align it towards market management,” Pandey said. 

Commenting on other proposed stake sales, he said that no expression of interests have been issued for either Rashtriya Ispat Nigam Ltd (RINL) or Concor. “RINL disinvestment was approved by the Cabinet in 2021 and we will have to wait in what manner we can move forward,” he said. 

In the strategic disinvestment of Shipping Corporation of India Ltd, he said that several procedural issues have to be completed by the administrative ministry before it can be taken forward. 

“There are nuts and bolts that the ministry is looking at -- from the issue of Employees’ Provident Fund trust to change of land titles and land use titles by Mumbai customs. The listing of but certain formalities are being done at the state level,” he said, adding that the government will take stock of this once these matters are completed. 

The Centre is looking to sell 63.75 percent stake in Shipping Corporation of India.