Govt invites bids to engage asset valuer for IDBI Bank sale

The government is looking to engage an asset valuer for valuing assets and providing assistance in the strategic disinvestment of IDBI Bank.

The government along with the LIC is selling about 61 per cent stake in IDBI Bank and has received multiple Expressions of Interest (EoI) for the same.

Currently, the government and the RBI are in the process of vetting the bids received. Security clearance from the government and 'fit and proper' clearance from the RBI would be necessary for the bidders to move to the second stage of bidding process which is due diligence and subsequent invitation of financial bids.

The Department of Investment & Public Asset Management (DIPAM), on behalf of Gol and LIC, on Monday floated an RFP to engage a "reputed Asset Valuer Entity -registered with Insolvency & Bankruptcy Board of India (IBBI), to act as the Asset Valuer for undertaking the IDBI Bank assets' valuation and provide requisite assistance in the process of strategic disinvestment of IDBI Bank, till the completion of the transaction". The last date to submit bids is October 9.

The asset valuer would be required to value IDBI Bank's investments (including investments in subsidiaries and associates and joint ventures and affiliates, as applicable); loans & advances; fixed assets and other assets.

The bank's liabilities include deposits, borrowings and other liabilities and provisions. The asset valuer shall work closely with transaction advisor and legal advisor appointed by DIPAM.

"The contract (of asset valuer) in respect of the assignment shall be initially valid for a period of 3 (three) years from the date of issue of appointment letter and shall be extendable by 1 (one) more year on existing terms and conditions," the RFP said.

The Cabinet Committee on Economic Affairs (CCEA) in May, 2021, had approved strategic disinvestment of GoI and LIC's equity, along with transfer of management control, in IDBI Bank.

Following this, DIPAM, which manages government holding in state-owned enterprises, in October, 2022, invited EoIs for selling 30.48 per cent stake in IDBI Bank, along with 30.24 per cent stake of LIC.

As of March 2023, LIC holds 49.24 per cent, while the government holds 45.48 per cent in IDBI Bank. After the strategic sale, the government and LIC will own 15 per cent and 19 per cent respectively in IDBI Bank, taking their total holding to 34 per cent.

The investors who have put in EoIs have already submitted with their preliminary bids required information to secure 'fit and proper' and security clearance. Shares of IDBI Bank closed at Rs 64.96, up 8.03 per cent over previous close on the BSE.

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