The government expects the sale process of IDBI Bank to conclude by September next year.

The financial bids for the sale will be invited by March 2023, PTI quoted officials as saying.

Last week, the government along with Life Insurance Corporation (LIC) invited preliminary bids for selling 60.72% stake in IDBI Bank. 

While the government will divest 30.48% equity, state-owned Life Insurance Corporation of India (LIC) will offload 30.24% stake in IDBI Bank.

The deadline for putting in Expression of Interest (EoI) is 16 December.

The government will follow a two-stage process. In the first stage, the eligible bidders will have to clear a ‘Fit and Proper’ assessment by the Reserve Bank of India (RBI) and security clearance by the ministry of home (MHA) affairs.

After due diligence, the qualified bidders in the second stage will be under a confidentiality clause where financial bids will be sought.

Usually it takes about six months for the process of due diligence to get completed and financial bids to come in. We hope to invite financial bids for IDBI Bank by March, news agency PTI quoted officials as saying.

A lot of queries are expected to be raised during the due diligence process, considering that this would be the first case of strategic sale in bank. The process of IDBI Bank strategic sale is likely to conclude by September, the officials added.

Private sector banks, foreign banks, Reserve Bank of India(RBI) registered non-banking finance companies, Sebi-registered Alternative Investment Funds (AIFs), a fund/investment vehicle incorporated outside India would be allowed to submit bids, either individually or as consortium.

The net worth threshold for bidders has been kept at Rs 22,500 crore, and they must report net profit in three of the past five years. Besides, 40% of the equity would have to be locked in for 5 years.