Kotak Mahindra Bank has joined the IDBI Bank privatization process. According to reports, the bank is showing interest in acquiring a stake in IDBI Bank. The government aims to complete the privatization by fiscal year 2026. Currently, the central government holds a 45.48% stake, and LIC holds a 49.24% stake. IDBI Bank shares closed lower on Friday.
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Bank Privatization: New discussions have begun regarding the privatization of IDBI Bank. After a long wait, according to a recent media report, Kotak Mahindra Bank has also joined the race to sell its stake.
According to a report by NDTV Profit, in addition to Oaktree Capital and Fairfax, Kotak Mahindra Bank has also expressed interest. However, it is worth noting that Kotak Mahindra Bank has not officially confirmed or denied this development. Dainik Jagran has not independently verified this report.
NDTV Profit’s report detailed the major concerns of applicants, noting that the biggest issue is IDBI Bank’s large market cap.
With a market capitalization of ₹1 lakh crore, it would be difficult for investors to acquire a 60 percent stake in the entity. However, the report also noted that with the advantage of equity currency, Kotak Mahindra Bank may consider a partial equity and partial cash merger deal. The central government had previously stated that it was considering finalizing the privatization of IDBI Bank by the end of FY2026.
Who holds how much stake?
The central government holds a 45.48% stake in IDBI Bank, while the Life Insurance Corporation of India holds 49.24%. The Department of Investment and Public Asset Management (DIPAM) has been tasked with selling a 61% stake in IDBI Bank.
According to a Reuters report, India has completed most of the formalities for the IDBI Bank stake sale and plans to invite bids between October and December. According to the country’s disinvestment secretary, this could happen as early as this month. The sale process was initially announced for 2022.
LIC was previously classified as a promoter shareholder in IDBI Bank, a status it gained after taking control of the bank in 2019. As a promoter, LIC had board representation and strategic influence over the bank’s operations. The reclassification strips LIC of these rights and reduces its role to that of a financial investor.
IDBI Bank Share Price
IDBI Bank shares closed down 2.53% at ₹100.25 on Friday.
