Seeking to sell a majority stake, the government has invited bids to engage an asset valuer for the strategic disinvestment of IDBI Bank. 

The asset valuer will have to conduct a valuation of IDBI Bank’s assets and provide assistance in the sale process of the lender. 

As of March 31, LIC holds 49.24% stake in IDBI Bank while the government has 45.48%.

The preliminary information memorandum inviting expressions of interest was published on October 7, 2022. While the government will sell 30.48% stake in IDBI Bank, LIC will divest 30.24%. The duo will thus dilute 60.72% stake in IDBI Bank along with transfer of management control.

In January, the government received multiple expressions of interest from local and international bidders. The list of potential bidders included Emirates NDB, Sumitomo Mitsui Banking Corp, Prem Watsa’s Fairfax Holdings, Kotak Mahindra Bank and Federal Bank.

The bids can be submitted by 9 October. The technical bid will open in October and the shortlisted bidder will be invited for presentation. After that the financial bid will open.

The Department of Investment & Public Asset Management (DIPAM), on behalf of the government and LIC, on Monday floated a request for proposal (RFP) to engage a “reputed Asset Valuer Entity -registered with Insolvency & Bankruptcy Board of India (IBBI), to act as the Asset Valuer for undertaking the IDBI Bank assets' valuation and provide requisite assistance in the process of strategic disinvestment of IDBI Bank, till the completion of the transaction.

“The contract (of asset valuer) in respect of the assignment shall be initially valid for a period of 3 (three) years from the date of issue of appointment letter and shall be extendable by 1 (one) more year on existing terms and conditions," the RFP said.

In May 2021, the cabinet committee on economic affairs (CCEA) had approved strategic disinvestment of the government and LIC's equity, along with transfer of management control, in IDBI Bank.

The asset valuer would be required to value IDBI Bank's investments (including investments in subsidiaries and associates and joint ventures and affiliates, as applicable); loans & advances; fixed assets and other assets, the RFP said.