Govt considers selling at least 51% of state-backed IDBI Bank: Report

India’s government is considering selling at least 51 per cent of state-backed IDBI Bank Ltd., according to people with knowledge of the matter.

Officials in the government and the state-backed Life Insurance Corp. of India, which together own about 94 per cent of IDBI Bank’s shares, are in talks about how much of their stakes they plan to sell, the people said. Both parties are expected to retain a stake in the lender after the sale, the people said, asking not to be identified as the information is confidential.

A panel of ministers will make the final decision on the structure of the deal, the people said. The government and LIC will formally seek to gauge buyer interest as soon as the end of September, one of the people said.

Shares in IDBI Bank have risen 6.3 per cent in the past 12 months, giving the lender a market value of about Rs 42,470 crore ($5.3 billion).

Representatives for India’s finance ministry and IDBI Bank declined to comment, while a representative for LIC didn’t immediately respond to requests for comment.

Authorities plan to sell at least some of the government and LIC’s stakes in IDBI Bank and cede management control. Reserve Bank of India will allow investors to buy a stake larger than 40 per cent, Bloomberg News has reported. Entities governed by the regulator normally need to seek permission to buy stakes above that threshold while non-regulated firms are capped at purchases of 10 per cent to 15 per cent.

Relaxing the criteria could widen the pool of potential buyers, energise the government’s privatization plans and bolster its finances as it seeks to mop up Rs 65,000 crore from several disinvestments this year. It has already raised more than a third of the target, primarily from the $2.7-billion initial public offering of LIC.