Firms including JM Financial, Ernst and Young and Deloitte have participated in the bid for managing the strategic sale of IDBI Bank. According to a notice by DIPAM, these firms would present a virtual presentation before the Department of Investment and Public Asset Management, the department responsible for handling the sale process, on August 10.
Deloitte Touche Tohmatsu India LLP, Ernst and Young LLP, ICICI Securities, JM Financial Ltd, KPMG, RBSA Capital Advisers LLP, and SBI Capital Markets have all submitted bids to function as transaction advisors.
DIPAM has to appoint one transaction advisor for the strategic sale of IDBI Bank, central government and LIC control 94 per cent stake together in the bank.
LIC has a 49.24 per cent interest in the bank, while the government owns 45.48 per cent. 5.29 per cent of non-promoter shares are held by non-promoters. The exact amount of stake dilution is yet to be determined.
In June, the government had invited bids from respected professional consulting firms/investment bankers/merchant bankers / financial institutions/banks, for facilitating/assisting DIPAM in the strategic disinvestment process of IDBI Bank Ltd. as well as the transfer of management control, till the time the transaction does not get completed.
The deadline for submitting bids was July 13, however, it was later extended until July 22.
The responsibility of Transaction Advisor will include advising and assisting the government on modalities of disinvestment and the timing; recommending the need for other intermediaries in the sale/disinvestment process and assisting in their identification and selection with proper Terms of Reference; preparing all documents such as the Preliminary Information Memorandum (PIM), organising roadshows, and suggesting measures to get the best price.
Besides, the advisor also needs to support IDBI Bank in setting up the e-data room and aiding in carrying out the conduct of the due diligence process.
In her Budget for 2021-22, Finance Minister Nirmala Sitharaman stated that the privatisation of IDBI Bank will be completed in the current fiscal year. In the current fiscal year, the government hopes to raise Rs 1.75 lakh crore via minority stake sales and privatisation.
One lakh crore would come in via the sale of government interests in public sector banks and financial institutions, while the remaining Rs 75,000 crore will be drawn from CPSE disinvestment revenues.
The government has received Rs 7,648 crore in disinvestment receipts so far this fiscal year.