PremiumThe government and Life Insurance Corp. of India plan to sell a combined 60.72% stake in IDBI Bank and transfer management control to the winning bidder.
NEW DELHI : The government may invite expressions of interest (EoIs) for Container Corp. of India (Concor) in January, initiating the privatization process of the state-run logistics company, an official aware of the matter said.
The government may also push the last date for submitting EoIs for the privatization of IDBI Bank to mid-January after it received submissions from interested bidders for an extension, the official said on the condition of anonymity.
“The Concor EoI should be issued in January... IDBI EoI date maybe extended, we have got requests for extending the deadline," the official said.
The government and Life Insurance Corp. of India plan to sell a combined 60.72% stake in IDBI Bank and transfer management control to the winning bidder. The government has allowed foreign funds and investment vehicles incorporated abroad to own more than 51% in the lender.
A two-stage process is expected to be followed for the IDBI Bank stake sale. In the first stage, bidders who meet the initial eligibility criteria must clear a ‘fit and proper’ assessment by the Reserve Bank of India and get security clearance from the home ministry. Qualified bidders have to next sign a confidentiality agreement with the government and proceed to the second stage, where financial bids will be sought.
LIC will sell 30.24% of its 49.24% stake in the bank, while the government will dilute 30.48% of its 45.48% holding. At present, 5.28% of IDBI Bank is held by the public. The official cited above added that the government was unlikely to restart the disinvestment process of Bharat Petroleum Corporation Ltd (BPCL) for now.
The government expects the corporate affairs ministry to approve the demerger of Shipping Corp. of India’s assets this month, after which it will initiate the strategic sale. The official said the transaction was unlikely to be completed within this fiscal year.
“BEML, Shipping Corp. -- Unlikely that it will be completed this fiscal... we may receive the bids within this fiscal," the official said. He added that the share allocation of BEML after its asset demerger has been completed.
The share allocation process of National Mineral Development Corp. has started after the demerger of assets, the official said.
The government has invited preliminary bids for the strategic sale of NMDC’s Nagarnar Steel Plant. The last date for submitting bids for NMDC Steel Ltd is 27 January. The assets are being demerged from NMDC into a separate company NMDC Steel Ltd (NSL). After the demerger, NSL shares will be listed on the BSE, National Stock Exchange of India and Calcutta Stock Exchange.
However, these transactions alone will not help the government achieve its divestment target of ₹65,000 crore for FY23, and the department of investment and public asset management (DIPAM), tasked with the sale of government shareholding in public sector enterprises, will have to focus on offer-for-sale kind of transactions in existing listed government companies.
DIPAM secretary Tuhin Kanta Pandey said at a CII event on Friday that the government had already achieved ₹62,000 crore of the target for FY23, including the dividend amount of ₹34,000 crore from dividends issued by PSEs to shareholders including the government.
“We have got actually 62,000 crore of resources already raised this year," he said, noting that the CPSE Index had grown twice compared to equity index this year, showing the performance improvement of the PSEs and their returns to shareholders.
Pandey added that the government was undertaking several transactions including IDBI Bank, HLL Lifecare, BEML and SCI strategic sales, of which some were taking time since there was a need to demerge land assets.