IDBI Bank gains 10% as report says RBI has begun bid evaluation process

According to Reuters, the RBI is evaluating at least five potential bidders interested in picking up a majority stake in state-owned IDBI Bank Ltd

Shares of state-owned lender IDBI Bank zoomed as much as 13 per cent in the intra-day trade, before settling nearly 10 per cent higher on the BSE on Thursday, amid reports that the Reserve Bank of India has begun evaluating bids by potential buyers who have expressed interest in picking up a majority stake in the lender.

The benchmark S&P BSE Sensex ended 0.06 per cent up at 60,431 as against a 9.6-per cent rally in the IDBI Bank. The stock quoted at Rs 51.67 apiece at close.

"The Reserve Bank of India (RBI) has begun evaluating at least five potential bidders interested in picking up a majority stake in state-owned IDBI Bank Ltd", news agency Reuters reported today. READ HERE

The report named Kotak Mahindra Bank (up 1.35 per cent), Prem Watsa-backed CSB Bank (down 0.07 per cent), and Emirates NBD as potential bidders. Business Standard couldn't independently verify the names of the likely bidders. 

Meanwhile, Business Standard had earlier reported that the strategic sale of stakes held by government and state-owned Life Insurance Corp of India (LIC) in IDBI Bank is expected to move to the second stage by the first quarter of FY24.

According to the report, the proposed IDBI stake sale is divided into two stages. In the first, an expression of interest (EOI) is invited, followed by a 'Fit and Proper' assessment and security clearances.  

The second stage is where qualified bidders will be provided with the Request for Proposal (RFP) document and further details of IDBI Bank, so that they can submit financial bids on the terms set out in the RFP. READ MORE

The government and Life Insurance Corporation (LIC) are selling 60.72 per cent stake in IDBI Bank, for which they had invited bids in October. The last date was set at December 16, but was later extended to January 7.

Pursuant to the transaction, the government will own a 15 per cent stake and LIC 19 per cent in IDBI Bank, taking their total holding to 34 per cent.

============================
Disclosure: Entities controlled by the Kotak family have a significant holding in Business Standard Pvt Ltd