According to those with knowledge of the situation, the Indian government is considering selling at least 51% of the state-owned IDBI Bank Ltd.
Government representatives are in discussions with the state-owned Life Insurance Corp. of India, which owns approximately 94% of the shares in IDBI Bank, about how much of their holdings they intend to sell, according to the sources. The persons, who requested anonymity because the information is private, stated that both parties anticipate holding onto a stake in the lender following the sale.
The ultimate choice about the deal's structure will be made by a committee of ministers, according to the sources. According to one of the persons, the government and LIC would formally attempt to gauge buyer interest as early as the end of September.
The market value of IDBI Bank has increased by 6.3% over the last 12 months to 424.7 billion rupees ($5.3 billion).
A spokeswoman for LIC did not immediately reply to calls for comment. The Indian finance ministry and IDBI Bank declined to comment.
The government and LIC intend to sell at least a portion of their ownership holdings in IDBI Bank and hand over management. According to Bloomberg News, the Reserve Bank of India will let investors to purchase stakes greater than 40%. When purchasing stakes above that level, entities managed by the regulator often need permission, whilst non-regulated corporations are restricted to 10% to 15% purchases.
In order to raise 650 billion rupees through numerous disinvestments this year, the government needs to expand the pool of possible buyers, reenergize its privatisation efforts, and strengthen its finances. More over a third of the target amount has already been raised, mostly from LIC's $2.7 billion IPO.