BackGovt weighs various options to bring down its stake in IDBI Bank
The government is looking at 3-4 options, including private placement of shares to institutional investors through QIP route, to bring down its stake in IDBI Bank
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New Delhi: The government is weighing various options, including qualified institutional placement (QIP), to bring down its stake in IDBI Bank.
The government currently holds 80.96% stake in the Mumbai-based bank. “Three-four options are being looked at, including private placement of shares to institutional investors through QIP route," a finance ministry official told PTI.
The proposal for the issue of equity capital through various alternative modes, including QIP, is listed as one of the agenda for the annual general meeting of the bank to be held in August.
A decision in this regard will be taken in the next few months, the official said, adding the government has already started the transformation process of the bank like re-balancing of its assets along with shedding of stake in the non-core business.
In addition, the bank is getting adequate capital support to strengthen its financial health, the official said.
Earlier this year, the government infused Rs10,610 crore, the highest to any public sector bank. Out of this, Rs7,881 crore was allotted by way of recapitalisation bonds, and Rs2,729 cr as the direct capital infusion for FY18.
It is to be noted that finance minister Arun Jaitley in 2016-17 Budget had announced that the government will take it forward and also consider the option of reducing its stake to below 50% in IDBI Bank.
Jaitley had said that India is not ready for privatisation of PSU banks and their present characteristics will continue except for IDBI Bank. “We are trying to consolidate some of the banks, which may otherwise find it difficult in a competitive environment ... In one case we are thinking of reducing the government stake to 49%, IDBI Bank," he had said.
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