Govt planning to bring down stakes in IDBI Bank


IDBI BANKThe centre is trying out all its ways, including Qualified Institutional Placement (QIP), to bring down its stakes in public lender IDBI Bank.

At present, the government holds 80.96 per cent stake in the Mumbai-based bank.

Reportedly, the centre is chalking out three-four options, including private placement of shares to institutional investors via Qualified Institutional Placement (QIP) route.

The plan pertaining to the issuance of equity capital via various alternative modes, including QIP, is listed as one of the agenda for the annual general meeting of the bank, going to be held in August.

A decision in this line will be taken in the next few months and the centre has already started transforming the process in this regard such as re-balancing of its assets along with bringing down its stake in the non-core business.

The bank is receiving an adequate amount of capital support for strengthening its financial health, said an official from the bank.

Making the highest ever infusion made in the public sector bank, the centre has contributed Rs 10,610 crore to the bank, earlier this year.

Out to this total contribution, Rs 7,881 crore was issued through recapitalisation bonds, and Rs 2,729 crore in the form of the direct capital infusion for FY18.

Union Finance Minister Arun Jaitley in its Budget speech (2016-17) stated that the government will be considering the option of scaling down its stake to below 50 per cent in IDBI Bank. Further, Jaitley said that India is not yet ready for privatisation of Public Sector.

“We are trying to consolidate some of the banks, which may otherwise find it difficult in a competitive environment … In one case we are thinking of reducing the government stake to 49 per cent, IDBI Bank,” he had said.

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