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The quantum of stake dilution by the centre and Life Insurance Corporation of India (LIC) for ceding management control in IDBI Bank will be known post roadshows with investors, said Tuhin Kanta Pandey, secretary of Department of Investment and Public Asset Management (DIPAM).
The lowering of stake by the Centre and LIC would be decided post consultation with investors during roadshows, and then the expression of interest (EoI) document would be structured, Pandey said.
The centre holds 45.48 per cent stake in the bank, while LIC holds a 49.24 per cent stake. When the Cabinet Committee on Economic Affairs (CCEA) had approved strategic divestment of IDBI Bank, the centre had said the quantum of stake dilution by the government and LIC will be decided while structuring the transaction, in consultation with the Reserve Bank of India (RBI).
Even as it is looking to transfer management control in IDBI Bank, the government is unlikely to grant any special dispensation to the new buyer by capping its voting rights at 26 per cent, even if the investor picks up 50 per cent or more stake in the lender.
The issue has been part of deliberations between the government and the RBI as the former is finalising conditions for the strategic divestment of IDBI Bank, and will soon float an expression of interest. The centre is also learnt to be in sync with the RBI’s view that the voting rights of a buyer should be capped at 26 per cent, irrespective of the quantum of stake it buys in IDBI Bank.
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