The Department of Investment and Public Asset Management (DIPAM) has decided to scrap the bid for an asset valuer for the strategic disinvestment of IDBI Bank, a move that might potentially delay the bank’s disinvestment initiative commenced earlier this year. The bid, originally issued in September, is now set to be replaced with a new request for proposal (RFP).
On September 1, DIPAM started the process by asking for proposals for value of IDBI Bank. The main goal is for the government and LIC to sell about 60.72% of their shares in the bank. The government plans to sell 30.48%, and LIC wants to sell 30.24%. This will give control of the bank to a strategic buyer. After the sale, LIC will still have 19%, and the government will keep 15%.In October of the previous year, the Centre had called for expressions of interest from potential acquirers, leading to several proposals by January.
However, the Indian government has now decided to cancel the bidding process to hire an asset valuer for the planned IDBI Bank share sale, as announced in a statement by the Department of Investment and Public Asset Management. The government has not provided a specific reason for this decision. Instead, they plan to initiate a fresh round of bids to select a valuer for their stake in the lender.
According to CNBC,the decision to cancel the bidding process comes after the government had invited bids to appoint a valuer, and subsequently relaxed the criteria last month, finding the initial conditions to be stringent.
Tuhin Kanta Pandey, the Secretary of the Department of Investment and Public Asset Management, revealed last week that the Indian government does not expect to conclude the sale of IDBI Bank by the end of the current financial year on March 31, 2024. This latest development introduces an element of uncertainty into the timeline of the IDBI Bank disinvestment and underscores the complexities inherent in such strategic initiatives.