The Indian government and Life Insurance Corporation (LIC) are actively proceeding with their plans to divest a 61% stake in IDBI Bank, a move that has drawn several Expressions of Interest (EOI), as reported on Monday. The Department of Investment and Public Asset Management (DIPAM) disclosed that the bank holds deferred tax assets worth ₹11,520 crore and 120 properties across India's top cities, predominantly in Mumbai. These assets account for 94% of the bank's fixed assets and about 3% of its total assets.
As part of the divestment process, the authorities are looking for an asset valuer who will undertake a comprehensive evaluation of IDBI Bank's assets. This includes investments, loans, advances, and fixed assets spread across seven cities. The deadline for finding a suitable valuer is set for October 30.
The asset valuer's responsibilities will extend beyond the evaluation of tangible assets. They will also be tasked with identifying the fair value of liabilities and uncovering unrecorded intangible elements not listed on the bank's balance sheet. After executing a confidentiality agreement, the appointed asset valuer will receive a complete list of IDBI Bank's fixed assets and is expected to value the bank's investments in its subsidiaries or associates as per the Terms of Reference.
The Centre and LIC aim to decrease their combined stake in IDBI Bank from 94.72% to 34% through this 61% stake sale by October 30, 2023. Amid these developments, IDBI's stock experienced a slight dip of 1.73% on BSE, leaving the bank's market capitalization at ₹74,998.01 crore (INR100 crore = approx. USD12 million).
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