IDBI Bank shares surged nearly 20% on Wednesday, 17 June, amid reports that the government is exploring options to revive the long-pending privatisation of the lender.
According to a news report, the Centre is evaluating ways to restart the disinvestment process, including the possibility of reconsidering bids submitted by Prem Watsa-led Fairfax Financial Holdings and Emirates NBD. The bids were earlier rejected after failing to meet the undisclosed reserve price, sources familiar with the matter told the publication.
The report said the bids remain “alive” and the government is examining legal provisions under the tendering framework that could allow acceptance of offers below the reserve price under certain circumstances.
While the reserve price has not been made public, a decision is expected soon as the government looks to strengthen its non-tax revenue collections. A senior government official cited by The Economic Times said all options remain under consideration, noting that the privatisation process was never formally scrapped despite the financial bids falling short of expectations.
As part of the sale process, the successful bidder will be required to undergo a final assessment by the Reserve Bank of India (RBI) to ensure compliance with the regulator’s ‘fit and proper’ criteria. The transaction will also require approvals from relevant statutory and regulatory authorities, including the Competition Commission of India (CCI).
In addition, the winning bidder will have to make an open offer to minority shareholders in accordance with applicable takeover regulations.
