According to CNBC TV-18 sources, the central government is seeking an extension from the markets regulator for the 25 percent minimum public shareholding (MPS) norm for IDBI Bank following privatization.
On November 18, the channel reported that the government is sticking to the December 16 deadline for receiving bids for the IDBI Bank.
According to sources, the Securities and Exchange Board of India promoters - LIC and government - hold a combined 95 percent stake in the lender.
With effect from January 21, 2019, the Reserve Bank of India (RBI) classified IDBI Bank as a private sector bank for regulatory purposes. If LIC (SEBI) allows both the government and Life Insurance Corporation (LIC) to be classified as public shareholders, the minimum public shareholding criterion will be met automatically.
Markets regulator SEBI requires all listed entities, excluding state-owned enterprises, to have a minimum of 25% public shareholding within three years of listing. IDBI Bank is exempt from the shareholding norm because it is majority owned by the government and a quasi-government firm, and it has acquired a majority stake in the lender. The government invested Rs 27,000 crore in IDBI Bank between April 1, 2010 and March 31, 2021, putting the average cost of stock acquisition at Rs 60 per share.