state-owned insurance giant LIC It is expected to recover Rs 21,624 crore Investment it was made in IDBI Bank An official said that unless the lender is privatized, the share prices are likely to rebound to 2019 levels. The official said that since the beginning IDBI The bank’s privatization process In May last year, the share price has increased from Rs 35 per share to Rs 45 per piece.

“We are looking forward to IDBI Bank Script to proceed. The price is expected to move closer to the price at which LIC Had bought stake in 2019,” the official told PTI.

The government and Life Insurance Corporation (LIC) together hold 94.72 per cent stake in IDBI Bank. In this, LIC’s stake is 49.24 percent, while the rest 45.48 percent is with the government. Public shareholders hold 5.28 per cent.

LIC had bought 51 per cent stake in IDBI Bank in 2019 for Rs 21,624 crore at an average price of Rs 61 per share. After a QIP issue in December 2020, LIC’s stake came down to 49 per cent.

In addition, the government and LIC together invested Rs 9,300 crore in IDBI Bank to bring it out of the prompt corrective action (PCA) framework of the RBI.

“The privatization of IDBI Bank will be a win-win for both the government and LIC,” the official said.

Shares of IDBI Bank closed at Rs 44.95, up 2.16 per cent from the previous close on the BSE.

Selling 61 per cent stake at the current market price will fetch about Rs 29,000 crore to the exchequer.

The privatization of IDBI Bank was first announced in the Union Budget for 2021-22, following which the Cabinet Committee on Economic Affairs gave in-principle approval for strategic disinvestment and transfer of management control in May 2021.

On October 7, 2022, the government invited EOIs from investors to buy 60.72 per cent stake in IDBI Bank with management control and set December 16 as the deadline for submission of initial bids.

The Department of Investment and Public Asset Management (DIPAM) has invited Expression of Interest (EoI) from potential investors stating that the potential investor should have a minimum net worth of Rs 22,500 crore, should have reported a net profit in 3 of the past three years. To be eligible to bid for IDBI Bank 5 years and a maximum of 4 members in a consortium will be allowed.

The successful bidder will have to compulsorily lock-in at least 40 per cent of the equity capital for 5 years from the date of acquisition.

It further said that the selection of eligible interested parties and the amount of equity shareholding of such entities in IDBI Bank would be decided by the Reserve Bank and the bidder would have to approve a ‘fit and proper’ assessment made by the banking regulator.

It also barred large industrial/corporate houses or individuals from participating in the bidding process.