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HomeBusinessDoubts over IDBI stake sale due to weak response | India News

Doubts over IDBI stake sale due to weak response | India News

NEW DELHI: The government’s plan to sell its stake in IDBI Bank, along with LIC, has received a tepid response, raising a fresh question mark over the transaction.
Some of the private lenders, who considered buying the equity in what has been a perpetual problem child for the government, are said to be not entirely convinced about its long-term prospects. IDBI Bank, which was earlier a development financial institution, still has a large pool of legacy assets, which impact performance in difficult times.
Besides, the government was hoping for a special dispensation from the Reserve Bank of India on ownership and equity dilution road map but the regulator has refused to carve out a separate framework for the bank.
The government, however, maintained it has not given up yet. “Our position is clear on IDBI Bank, we will exit IDBI Bank at least from the management position and the process has been set in motion. We have to dispossess ourselves of the notion that if there is a number in the Budget it has to relate to one particular transaction. The Budget involves a number of transactions which goes on. The government is also a market player and stock markets have to play with demand and supply,” Dipam secretary Tuhin Kanta Pandey said in Mumbai.
In Delhi, a government official said DIPAM was working on floating an expression of interest and the sale was unlikely to be deferred. He did not give a timeframe by when the expression of interest would be floated.
The IDBI Bank sale – which has been in the pipeline for years – will also decide the fate of at least two other state-owned banks, which are lined up for disinvestment, although the government has not moved to amend the law even 15 months after finance minister Nirmala Sitharaman announced the move in the 2021 Budget. The government has been forced to postpone BPCL sale due to lack of buyer interest even as it has gone back to the drawing board on Shipping Corporation. Concor, the third high-profile privatisation deal has been a non-started as railways have not moved on the land policy.




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