Setting the ball rolling, the government has invited proposals to appoint transaction and legal advisors for strategic divestment of IDBI Bank.

Though the request for proposals (RFP) has not mentioned how much stake would be diluted, the government had earlier indicated the sale of a majority stake in the bank, along with management control. The process would involve the sale of stake by the government and the Life Insurance Corporation of India (LIC).

The Department of Investment and Public Asset Management, in the RFPs issued, said that the bids by interested parties should be submitted by 13 July.

The transaction advisor will be required to undertake tasks related to all aspects of the proposed strategic disinvestment culminating into successful completion of the transaction. The legal adviser, on the other hand, will review and advise on all legal contracts and advise on the regulatory norms and assist in securing approval and exemptions, wherever necessary.

The Union government and LIC own 45.48% and 49.24%, respectively, in IDBI Bank. LIC, which acquired majority stake in 2019, is currently the promoter of IDBI Bank with management control.

The government and LIC may not initially sell their entire stakes in IDBI Bank. “The extent of respective shareholding to be divested by GoI and LIC shall be decided at the time of structuring of transaction in consultation with the Reserve bank of India," the cabinet secretariat had said in a statement.