NABARD BUYS ADDITIONAL 7% STAKE IN SIDBI FOR ₹900 CRORE

MUMBAI: The National Bank for Agriculture and Rural Development (Nabard) has bought an additional 7% stake in Small Industries Development Bank of India (Sidbi) for ₹900 crore from troubled public sector lender IDBI Bank Ltd, according to two people familiar with the matter, including Sidbi chairman Mohammad Mustafa.

This is the largest investment made by the apex rural financial institution so far, and raises its shareholding in Sidbi to 10%.

RBI restricted IDBI Bank’s operations in May after its financial ratios worsened. The bank, which is plagued by bad loans, is trying to sell its non-core assets, and had put its entire 16.25% shareholding in SIDBI on the block in August. The bank’s attempts to find potential buyers received tepid initial response initially. On September 27, it wrote to stock exchanges that it has sold 9.03% in SIDBI, without mentioning the buyers.

According to data shared by Sidbi, existing shareholders bought most of these shares — 6.99% by Nabard, 2.04% by Life Insurance Corp of India, 0.5% by Vijaya Bank and 0.5% by Canara Bank. With this, LIC holds 14.25% in SIDBI, Vijaya Bank 0.8% and Canara Bank 3.64%.

Email and calls to Nabard did not elicit any response.

According to its FY17 Annual report, Nabard has invested a total of ₹153 crore across nine companies so far.