Govt Wants Rs 60,000 Crore Valuation For IDBI Bank’s Sale To Private Companies

The latest updates revealed that the center is pushing for a valuation of around $7.7 billion for state-owned IDBI Bank.

Govt Wants Rs 60,000 Crore Valuation For IDBI Bank's Sale To Private Companies

Privatization of IDBI Bank

This could be the biggest sale of the government’s stake in a lender in decades, according to the sources.

At the start of this month, the government invited bidders for a 60.72% stake in the Mumbai-listed lender.

Moving ahead, the sources said that the bidders could get regulatory approvals and security clearances after November as the process proceeds.

In this deal, the administration is looking for the valuation target with a premium of roughly 33%, based on IDBI Bank’s market value of about $5.8 billion as of Thursday.

Improved Profitability For IDBI Bank

It seems that improved profitability from IDBI Bank could support the valuation target, sources saidon the condition of anonymity

Further added that potential investors ranging from domestic and foreign banks to non-banking financial companies and private equity funds have expressed initial interest in the asset.

So far, the center and the state-owned Life Insurance Corp. of India together own about 95% of IDBI Bank.

Earlier in 2017, IDBI Bank was penalized by the central bank with several restrictions on lending after its bad-loan ratio surged and capital ratios depleted. 

IDBI Bank’s 51% stake was occupied by LIC during 2019 in a government bailout of the firm.

Last year,  the Reserve Bank of India removed sanctions on the bank paving the way for its proposed sale.

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