IDBI Bank divestment: Big meeting this week, stock jumps 7%, sources tell us what the decision could be

News Topical, Digital Desk : The IDBI Bank disinvestment process could soon gain momentum, with the bidding process likely to begin next month, according to an exclusive report by Money Control, citing sources. Citing government officials, the report said that an inter-ministerial group comprising secretaries from the Department of Investment and Public Asset Management and the Department of Financial Services is expected to meet on October 31st to discuss and finalize the bidding process for the IDBI Bank stake.

IDBI Bank stock is seeing a sharp rise in Tuesday's session. The stock jumped more than 7% in about an hour in the morning session.

What could happen in this meeting? Sources said that this meeting is expected to approve the final draft of the Share Purchase Agreement (SPA). This is a key document that details the buyer's responsibilities, transfer of management control, and post-sale terms. A timeline for inviting financial bids from shortlisted investors will also be set. A person familiar with the process said that this meeting will be crucial in taking the entire process to its final stage. He said, “Most of the preliminary work has been completed. The remaining procedures are expected to be approved at the meeting at the end of the month so that financial bids can be invited without delay.” The approval of the long-awaited SPA and the process of inviting financial bids will be the final stage of the IDBI Bank privatization process that has been going on since 2021. The central government and the Life Insurance Corporation of India (LIC) jointly hold approximately 94.71% stake in the bank and are planning to sell 60.72% of this stake to a strategic investor, after which the management control of the bank will also be handed over to it. A government source said, “The documents related to the transaction are now in the final stages. Once the IMG approves, DIPAM will expeditiously invite financial bids.” He also said that approvals from the Core Group of Secretaries (CGD) on Disinvestment and the Group of Ministers (GoM) chaired by the Finance Minister will also be obtained expeditiously. Financial bids are expected to be invited by December, after which the evaluation process will begin. Once a winning bidder is selected and Cabinet approval is received, the deal will be completed—marking the first privatization of a bank in India in two decades. The government has already indicated that it intends to complete the transaction within this financial year. 
 

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