Government and state-backed life insurance corporation officials IndiaWhich is about 94% overall. owns
People said the bank’s shares are in talks about how much of their stake they plan to sell. Both parties are expected to retain a stake in the lender after the sale, the people said, asking not to be identified as the information is confidential.
People said a panel of ministers would take a final call on the structure of the deal. government and LIC One of the people said that it will try to formally assess the buyer’s interest in late September.
Shares have risen 6.3% over the past 12 months, giving the lender a market value of about 424.7 billion rupees ($5.3 billion).
Representatives for India’s Ministry of Finance and IDBI Bank declined to comment, while a representative declined to comment.
Did not immediately respond to requests for comment.
The officials plan to sell at least some stake in IDBI Bank to the government and LIC and hand over management control. Bloomberg News has reported that the Reserve Bank of India will allow investors to buy more than 40% stake. Entities governed by the regulator are generally required to seek permission to buy stake above that limit, while non-regulated firms are limited to a purchase of 10% to 15%.
The easing of norms could expand the pool of potential buyers, activate the government’s privatization plans and seek to raise Rs 650 billion from multiple disinvestments this year. It has already raised over a third of the target, mainly from LIC’s $2.7 billion initial public offering.