Financial bids for IDBI Bank are likely to be submitted within the current fiscal (FY25) but the privatisation exercise may be completed in the next financial year (FY26).
According to sources, the Reserve Bank of India has given the “fit and proper” report on potential bidders and the due diligence process will now be initiated. As part of due diligence, potential bidders will be given access to the virtual data room. The process will be completed in the coming months.
“Once the due diligence by the potential bidders is completed, financial bids would be called for. This is likely to be done within this financial year,” said a source familiar with the development.
This would mean that the privatisation of the lender would stretch into the next fiscal year 2025-26. “As of now, there is no fixed timeline for the exercise. It will be completed as early as possible,” the source underlined.
IDBI Bank reported a 39% year-on-year increase in its standalone net profit in the second quarter of the fiscal to Rs 1,836 crore.
As part of the disinvestment, the Centre along with Life Insurance Corporation of India will sell 61% stake in the bank. This includes 30.48% stake of the Government of India and 30.24% 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 was expected to be completed this fiscal, although a formal deadline has not been set. No specific target has also been put in the Union Budget 2024-25.
For FY25, the Budget has estimated raising Rs 50,000 crore from “miscellaneous capital receipts”, which will be a mix of asset monetisation and disinvestment. As per latest data, the Centre has raised Rs 38,318.64 crore as DIPAM receipts so far this fiscal. This includes Rs 8,625.05 crore from disinvestment receipts and Rs 29,693.41 crore from dividend receipts this fiscal.