The department of investment and public asset management (DIPAM) on Friday said the divestment process of government-owned IDBI Bank is on track as per the defined process. The government also termed reports indicating the disinvestment process of IDBI Bank might get deferred as "misleading, speculative, and baseless".

"Reports appearing in a section of the media indicating the possibility of deferment of IDBI Bank disinvestment are misleading, speculative and baseless. The transaction continues to be on track as per the defined process in post-EoI stage following receipts of multiple EoIs," Tuhin Mehta, secretary, DIPAM said in a tweet.

The central government and LIC together plan to sell 60.72% of shares in IDBI Bank. As part of the disinvestment plan, the Centre will offload a 30.48% stake in the lender, while the Life Insurance Corporation of India (LIC) will sell 30.24% in IDBI Bank. LIC and the government currently own 49.24% and 45.48% stake, respectively, in IDBI Bank, which collectively accounts for 94.72%.

The remaining 5.29% of shares are owned by retail investors. After the divestment process, the stake of LIC and the government will be reduced to 34%. In January this year, the government received an Expression of Interest (EoI) from the potential buyers. Both the government and the Reserve Bank of India (RBI) are evaluating the bids currently. As part of the divestment process, security clearance by the government, and fit and proper clearance by the RBI are necessary for bidders to move to the second round of the divestment process. The second round will entail scrutiny over financial bids.

In January, the Securities and Exchange Board of India (SEBI) allowed the government's shareholding in IDBI Bank to be reclassified as "public" post disinvestment on condition that its voting rights do not exceed 15% of the total voting rights of the bank. The market regulator has also directed the new buyer to comply with minimum public shareholding norms within one year of the sale.

Reclassification of the government's remaining 15% shareholding in IDBI as "public" will help the new buyer in meeting the mandated 25% minimum public shareholding norms.

On Friday, the shares of IDBI Bank surged 5.8% to hit an intraday high of ₹47.00 apiece on the Bombay Stock Exchange. During the session, the shares of IDBI Bank opened a tad higher at ₹44.45 against the closing price of the previous session at ₹44.40. In the past three months, IDBI Bank stocks have declined 18.36%. During the session, the market capitalisation of IDBI Bank stood at ₹50,159 crore with as many as 7,89,957 shares exchanging hands on the BSE against the two-week average of 6.79 lakh shares. The bank hit a 52-week high of ₹62 on January 9 this year, whereas it hit a 52-week low of ₹30.50 on June 30 last year.

IDBI Bank Divestment Plan

IDBI Bank divestment on track: Govt