India's IDBI Bank share sale unlikely before 2024 federal elections -sources

IDBI Bank

22/11/2023 12:16

By Nikunj Ohri and Ira Dugal
       MUMBAI, Nov 22 (Reuters) - The Indian government will
likely complete the sale of its majority stake in IDBI Bank
 IDBI.NS  only after the country's general elections in
mid-2024, said three sources aware of the matter, stretching out
a process that began in October 2022.
    The Reserve Bank of India, also the country's banking
regulator, has not yet completed "fit and proper" vetting on the
interested bidders, who include Emirates NBD and Canadian
billionaire Prem Watsa, after which the bidders can do their due
diligence and place their financial bids, the sources said.
    The finalisation of an agreement to buy 60.7% of IDBI and
regulatory approvals will take place only after general
elections, the first source said. The sources declined to be
named as they are not authorised to speak to the media.
    India's general elections are expected by May next year and
an outgoing government typically avoids major policy decisions
just ahead of polls.
    Last week, a government official said a sale was unlikely
this financial year, putting at risk the government's target of
raising 510 billion rupees ($6.13 billion) through share sales.
    The government had asked the RBI to speed up the vetting
process but this is taking time as foreign entities are also
interested in acquiring the lender, two sources said.
    The Indian finance ministry did not immediately respond to
an email seeking comment.
    After the central bank's clearance, potential bidders will
need at least two months to assess IDBI Bank's financials and
"adequate time" to firm up bids, said the third source.
    The government, which owns 45.48% in IDBI Bank, and
state-owned Life Insurance Corp of India  LIFI.NS , which holds
49.24%, together plan to sell 60.7% of the lender.
    On Tuesday, the government cancelled the bidding process for
hiring an asset valuer for the sale after only one bid was
received.
    This bidder's conditions were not acceptable to the
government and a fresh process will be initiated soon, said the
second source.
 
 ($1 = 83.2440 Indian rupees)

 (Reporting by Nikunj Ohri and Ira Dugal; Editing by Savio
D'Souza)
 ((Ira.Dugal@thomsonreuters.com; +91-9833024892;))