India seeks advisers for minority stake sales in state-run banks, financial firms

Central Bank of India

25/02/2025 04:42

NEW DELHI, Feb 25 (Reuters) - India has invited bids to
appoint merchant bankers and legal advisers to sell the
government's minority shareholding in select public sector banks
and financial companies.
    The government is looking to undertake minority stake sales
in state-run banks and financial firms through an offer for
sale, according to a document published on Monday on the
Department of Investment and Public Asset Management's website,
which did not name the lenders.
    The federal finance ministry is looking dilute minority
shareholdings in Central Bank of India  CBI.NS , Indian Overseas
Bank  IOBK.NS , UCO Bank  UCBK.NS , and Punjab and Sind
Bank  PUNA.NS , Reuters reported in November.
    The plan to lower the government’s stake in banks and
financial companies is required to comply with public
shareholding norms mandated by the markets regulator. 
    The Securities and Exchange Board of India requires
companies to maintain a 25% public shareholding, but has
exempted government-owned firms from meeting these norms till
August 2026.
    The Indian government owns more than 93% in Central Bank of
India, 96.4% in Indian Overseas Bank, 95.4% in UCO Bank and
98.3% in Punjab and Sind Bank. It also owns an 80% stake in Bank
of Maharashtra  BMBK.NS .
        In the past, public sector banks launched qualified
institutional placements (QIP) to raise capital, which, in turn,
reduced the government's stake in state-run banks.
    Merchant bankers and legal advisers will be appointed for
three years and are required to submit their bids by March 27,
the document said.
    India has ditched its ambitious privatisation plans and put
on hold a majority stake sale in at least nine state-owned units
after opposition from relevant ministries. 
    Instead, it is continuing with minority stake sales in
state-run companies. As of February, the government mopped up
86.25 billion rupees ($993.2 million) via stake sales in the
2024-25 financial year.


($1 = 86.8420 Indian rupees)

 (Reporting by Nikunj Ohri; Editing by Sonia Cheema)
 ((nikunj.ohri@thomsonreuters.com; +91 90284 60730; Reuters
Messaging: twitter.com/nikunj_ohri))