IDBI Bank strategic sale: 7 corporations in race for transaction advisor

IDBI Bank strategic sale: 7 corporations in race for transaction advisor

As many as seven corporations, together with JM Financial, Ernst and Young and Deloitte, have bid for managing the strategic sale of IDBI Bank.

These corporations would make a digital presentation earlier than the Department of Investment and Public Asset Management, which is dealing with the sale course of, on August 10, based on a discover by DIPAM.

The corporations which have bid for appearing as transaction advisor are Deloitte Touche Tohmatsu India LLP, Ernst and Young LLP,

, JM Financial Ltd, KPMG, RBSA Capital Advisors LLP and SBI Capital Markets.

DIPAM would appoint one transaction advisor for the strategic sale of IDBI Bank, during which the central authorities and LIC collectively personal greater than 94 per cent.

LIC, at the moment having administration management, has a 49.24 per cent stake, whereas the federal government holds 45.48 per cent within the financial institution. Non-promoter shareholding stands at 5.29 per cent.

The actual quantum of stake dilution can be determined later.

The authorities in June invited bids from reputed skilled consulting corporations / funding bankers / service provider bankers / monetary establishments / banks, for facilitating/aiding DIPAM within the strategy of strategic disinvestment of IDBI Bank Ltd. together with switch of administration management, until completion of the transaction. The final date for bid submission was July 13, which was later prolonged until July 22.

The Transaction Advisor can be required to advise and help the federal government on modalities of disinvestment and the timing; suggest the necessity for different intermediaries required for the method of sale/disinvestment and likewise assist in identification and number of the identical with correct Terms of Reference; preparation of all paperwork like Preliminary Information Memorandum (PIM), organise roadshows, recommend measures to fetch optimum worth.


The advisor would even be supporting IDBI Bank in establishing of the e-data room and aiding within the clean conduct of the due diligence course of, will assist place the divestment of GoI fairness in IDBI Bank to arrange roadshows and to generate curiosity among the many potential consumers.

The Cabinet in May had authorised the strategic sale of all the stake of the federal government and Life Insurance Corporation (LIC) in IDBI Bank Ltd.

In response to queries acquired from potential transaction advisors in IDBI Bank, the DIPAM had final month clarified that since LIC’s stake can be bought together with that of the federal government’s, a single transaction advisor would handle all the share sale course of.

The quantum of stake dilution can be declared earlier than RFP (Request for Proposal) stage of the transaction.

Finance Minister Nirmala Sitharaman in her Budget for 2021-22 had mentioned the method of privatisation of IDBI Bank can be accomplished within the present fiscal. The authorities goals to mop up Rs 1.75 lakh crore within the present fiscal from minority stake sale and privatisation.

Of the Rs 1.75 lakh crore, Rs 1 lakh crore is to return from promoting authorities stake in public sector banks and monetary establishments whereas Rs 75,000 crore would come as CPSE disinvestment receipts.

So far within the present fiscal the federal government has mobilised Rs 7,648 crore as disinvestment receipts.

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