Government and LIC to sell 61% stake in IDBI Bank:Deal with Canada’s Fairfax and Dubai’s Emirates NBD could happen in a month

The Government of India and Life Insurance Corporation of India are together preparing to sell their 60.7% stake in IDBI Bank. For this strategic disinvestment, Canada’s Fairfax Financial Holdings and Dubai’s Emirates NBD have placed bids, which are currently in the valuation stage. According to government sources, this entire deal could be finalized within the next one month. Bureaucrats’ Meeting to Review the Deal The process of stake sale in IDBI Bank is progressing rapidly. Sources said that on Monday, a panel of bureaucrats held a meeting in which the transaction was reviewed to take it forward. The revised bids of the companies are currently being examined in detail. Government and LIC Hold 94.72% Shares This proposed transaction is an important part of the central government’s Strategic Disinvestment Program. Speaking of the current shareholding pattern, the Government of India holds a 45.48% stake in IDBI Bank. Meanwhile, the government insurance company LIC holds 49.24% shares of the bank. Together, they are selling 60.7% of their total shareholding. Two major foreign companies are in the race There are two main contenders in the field to buy the controlling stake in IDBI Bank. The first among them is ‘Fairfax Financial Holdings’, the company of Canadian billionaire of Indian origin Prem Watsa. The second contender is Dubai’s leading banking group Emirates NBD. Largest foreign investment in India’s banking sector Based on current market prices, the total value of this proposed acquisition is estimated at approximately $5.7 billion. According to experts, if this deal is completed, it will be one of the largest foreign investments in the history of India’s banking sector. Processes may be completed within a month Government sources told news agency ANI that the valuation process is continuously progressing. After completion of all necessary and prescribed procedures, there is full expectation that the stake sale process will be finalized within the next one month. IDBI Bank shares rose 3% amid the news Amid news related to this disinvestment process, IDBI Bank’s shares witnessed a surge today. The bank’s share closed at the level of 86.48 rupees per share with a gain of 3%. What is Strategic Disinvestment? When the government sells a major portion of its stake (50% or more) in a government company or bank to a private or external company and also transfers the management control of that company to the buyer, it is called strategic disinvestment. Its objective is to promote private investment and work efficiency in government companies.