IDBI Bank majority stake sale likely post 2024 elections: Report

The government is expected to conclude the sale of its majority stake in IDBI Bank after the country's general elections in mid-2024, Reuters reported quoting three sources familiar with the matter. The process, initiated in October 2022, faces delays as the Reserve Bank of India is yet to complete the "fit and proper" vetting on interested bidders, including Emirates NBD and Canadian billionaire Prem Watsa.

The bidders will proceed with their due diligence and financial bids following the completion of the vetting process. The final agreement for the purchase of 60.7 per cent of IDBI and regulatory approvals will be formalised only post-general elections, the first source noted. India's general elections are anticipated by May next year, and governments typically refrain from major policy decisions just ahead of polls.

A government official mentioned last week that a sale was unlikely in this financial year, jeopardising the government's target of raising Rs 51,000 crore through share sales. The RBI has been urged to expedite the vetting process, but the involvement of foreign entities in acquiring the lender has contributed to the delay, as per two sources mentioned in the Reuters report.

Upon receiving the central bank's clearance, potential bidders will require a minimum of two months to assess IDBI Bank's financials and additional time to finalise their bids, stated the third source. The government, owning 45.48 per cent in IDBI Bank, and state-owned Life Insurance Corp of India, with a 49.24 per cent stake, collectively plan to sell 60.7 per cent of the lender.

On Tuesday, the government canceled the bidding process for hiring an asset valuer after receiving only one bid. The bidder's conditions were deemed unacceptable, prompting a fresh initiation of the process, as per the second source.

(With Reuters inputs.)