No govt, LIC veto post-privatisation of IDBI Bank

The government and state-owned insurer LIC, who will continue to hold significant shareholding in IDBI Bank post its privatisation, will not veto any proposals of the new owner as part of their plan to give the incoming promoters a free hand, a senior official said.

The government earlier this month invited bids for the sale of 60.72 per cent stake in IDBI Bank, which is 45.48 per cent owned by the government and 49.24 per cent by the Life Insurance Corporation of India (LIC).

At Friday’s closing price of Rs 44.30, IDBI Bank was valued at Rs 47,633 crore but the government is looking for at least a 30 per cent markup in the sale.

At the current price, the sale of 61 per cent stake would fetch about Rs 29,000 crore to the government.

The official said post-privatisation, the government and LIC shareholding will come down to 34 per cent but they do not intend to move in tandem to block any special resolution proposed by the new promoter.