In a recent development, IDBI Bank witnessed a decline of more than 3% in its stock value on the morning of November 22. This drop followed the government’s decision to cancel the ongoing bid invitation process aimed at appointing an asset valuer for the bank’s divestment.
The government, in collaboration with the Life Insurance Corporation (LIC), has been actively pursuing the divestment of its holdings in IDBI Bank. With the government holding a 45% stake and LIC holding 49.24%, a joint decision was made to sell a 60.7% stake in the bank.
The cancellation of the bid invitation process indicates a fresh start, as the Centre plans to issue a new request for proposal (RFP) to appoint an asset valuer. This decision comes after the RFP was extended four times.
This strategic move involves a comprehensive evaluation of IDBI Bank by the appointed asset valuer. The assessment encompasses determining the fair value of the bank’s investments, loans, advances, and a thorough scrutiny of its financial portfolio, including deposits, borrowings, and other liabilities.
The government’s initiative to appoint an asset valuer aims to bring transparency and fairness to the valuation proceedings.
As of 9:53 am, IDBI Bank shares were trading 2.9% lower at Rs 60.45 on the National Stock Exchange. Despite this recent dip, the stock has witnessed a 9% rise in 2023, aligning with the broader Nifty 50 rally.
In an earlier statement this month, a senior government official acknowledged that the proposed stake sale in IDBI Bank might not conclude by March 2024, citing compliance issues with the RBI’s fit and proper criteria.
