Is the Government Advancing with IDBI Bank's Disinvestment Plan This Fiscal Year?

New Delhi, May 5 (NationPress) The government’s strategy for disinvesting IDBI Bank is moving forward as part of a larger initiative to monetise assets through stake sales in the current fiscal year, as stated by Arunish Chawla, Secretary of the Department of Investment and Public Asset Management.

Chawla emphasized that the priority lies in consistent execution and long-term value generation, despite ongoing uncertainties in global economic conditions, during an exclusive interview with NDTV Profit.

The Centre, in collaboration with the Life Insurance Corporation of India (LIC), is set to offload a combined total of 60.72 percent stake in IDBI Bank, which includes 30.48 percent from the government and 30.24 percent from the insurance corporation.

He mentioned that the government is committed to adhering to regulatory requirements through systematic divestments in public sector banks and central public sector enterprises.

Furthermore, efforts to monetise land and infrastructure assets of MTNL are ongoing, with a flexible approach to meeting minimum public shareholding targets.

Chawla pointed out that the asset sales will be executed in a phased manner that is sensitive to market conditions. He noted that there have been multiple bids for significant transactions, including public sector bank stake sales, and due diligence is underway regarding the IDBI Bank deal.

The government has also extended deadlines for some firms scheduled for disinvestment to comply with the Securities and Exchange Board of India's (SEBI) public float regulations.

According to Chawla, the stake sale in IDBI Bank is being conducted as planned and is unaffected by broader macroeconomic challenges. He referred to it as a strategic sale that involves a multi-stage and multi-layered process.

A data room has been established, and due diligence has been finalized. Currently, negotiations for the share purchase agreement are in progress,” he added.

Regarding further stake dilution in LIC, Chawla stated that the government aims to fulfill the minimum public shareholding requirement by the fiscal year ending March 2027, in accordance with SEBI guidelines.

The government plans to initiate small but regular offers for sale, keeping liquidity and retail investors in mind. This has been a consistent policy, as large share offloads can negatively impact share prices. Market analysts emphasize the necessity of considering the market's capacity to absorb shares when planning any prudent stake sale.

For the fiscal year 2025-26, the government has set a disinvestment and asset monetisation target of Rs 47,000 crore.