IDBI Bank seeks fresh bids for its 13.7% stake in Sidbi
MUMBAI: State-owned lender IDBI Bank Ltd has sought fresh bids from potential buyers for its remaining 13.71% stake in Small Industries Development Bank of India (Sidbi).
Last month, the bank had mandated SBI Capital Markets to look for a buyer for its entire 16.25% stake in the financial institution but had to extend the date for submission due to tepid investor response. Of the total stake put on the block, 2% was picked up by Life Insurance Corporation of India (LIC) and 0.5% by Vijaya Bank, according to a senior official in the bank. With this, LIC’s stake in Sidbi stands at 14.2% and Vijaya Bank’s at 0.8%.
The deadline for submission of fresh bids is September 14, SBI Caps said in a public advertisement on Wednesday.
IDBI Bank is the second largest shareholder in Sidbi after State Bank of India, which owns a 16.73% stake. Other shareholders include government of India, which owns 15.4%, Punjab National Bank 3.99% apart from other public sector banks and insurance companies.
IDBI’s plan to sell a stake in Sidbi is part of its overall strategy to sell non-core assets to raise capital. The bank is aiming to garner around ₹5,000 crore in this financial year through the sale of non-core assets, IDBI Bank chief Mahesh Kumar Jain had said in June.
The bank’s capital adequacy ratio improved to 10.92% at the end of June from 10.70% at the end of March, though it was lower than the previous year’s figure of 11.80%. The bank received ₹394 crore from LIC and ₹1,861 crore from the government during the quarter.
According to the bank’s annual report for the year 2015-16, IDBI Bank holds a stake in National Securities Depository Ltd (NSDL), NSDL e-governance Infrastructure Ltd, Biotech Consortium India Ltd, North Eastern Development Finance Corp. Ltd and Pondicherry Industrial Promotion Development and Investment Corp. Ltd.
Apart from these, the bank also holds a stake in subsidiaries such as IDBI Asset Management Ltd, IDBI Federal Life Insurance, IDBI Capital Markets Ltd and IDBI Intech Ltd, among others. In June, the bank sold a 2.5% stake in CCIL, a clearing and settlement platform for transactions.
The bank, which is under the Reserve Bank of India’s (RBI) so-called prompt corrective action (PCA), had reported a net loss of ₹853.01 crore for the three months to June, compared with a profit of ₹241.10 crore a year ago as bad loans ballooned to a record high.