SMBC Bank, Oaktree submit EoIs for IDBI's strategic stake sale

Mumbai: Sumitomo Mitsui Banking Corporation Group (SMBC Bank) of Japan and Oaktree Capital Management are among those that have submitted expressions of interest (EoIs) for the strategic stake sale in IDBI Bank, said people aware of the matter. Oaktree is a US alternative assets firm founded by Howard Marks, one of the world's most formidable distressed debt investors.

The stake being sold is held by the Centre and Life Insurance Corporation of India (LIC). "Multiple expressions of interest received for the strategic disinvestment of govt and LIC stake in IDBI Bank," Tuhin Kanta Pandey, secretary, Department of Investment and Public Asset Management (DIPAM), had tweeted on January 7. "The transaction will now move to the second stage." He did not give specific names.


January 7 was the last date for submitting EoIs. The financial bids are expected to be invited by March end. ET was the first to report on November 29, 2022 that Sumitomo Mitsui Financial Group and another global bank were among five potential investors that have sought information about the sale of equity in IDBI Bank through a formal query process that closed on November 10.

Eligibility Criteria
It is widely believed a consortium, two foreign banks and a private equity firm are said to be among those that have submitted the paperwork. There is speculation that JC Flowers, Canada-based Fairfax group and Emirates NBD Bank may be interested.

Toshitake Funake, India CEO of SMBC, and spokespersons of Oaktree didn't respond to queries sent on Saturday.

There is no guarantee that those submitting EoIs will submit firm bids.

The government has said that the potential investor should have a minimum net worth of Rs 22,500 crore and have reported a net profit in three out of the past five years to be eligible to bid.

A maximum of four members will be allowed in a consortium and the successful bidder will be mandated to lock in at least 40% of the equity capital for five years from the date of acquisition.

The government and LIC together are looking to sell 60.72% in IDBI Bank and had invited bids from potential buyers last October. The two together hold 94.71% in the lender. The successful bidder will have to make an open offer for the acquisition of 5.28% of public shareholding.

The IDBI Bank stock has jumped 61% in the last six months in anticipation of a transaction. It closed on Friday flat at ₹54.50.