DON’T MANDATE GREEN BONDS: RAJAN TO CENTRAL BANKERS
KPMG India has been appointed the transaction adviser for strategic divestment of IDBI Bank, and the firm will assist the government in the sale for ~1. About seven firms had bid for the role: Deloitte Touche Tohmatsu India LLP, Ernst and Young LLP, ICICI Securities, JM Financial Ltd, KPMG, RBSA Capital Advisors LLP, and SBI Capital Markets. KPMG placed the lowest bid of ~1, and was selected, said an official.
The near-zero bid could make KPMG one of the largest players in managing deals in the financial services space if IDBI Bank sale is a success, said another official.
KPMG’S presence in India is already strong and it is well known in the financial services space, the firm said in response to Business Standard’s queries. “With regards to the IDBI bank sale, DIPAM (Department of Investment and Public Asset Management) is running the process for selecting a transaction advisor. Hence we would refrain from commenting on the ongoing process,” KPMG said.
Firms have been placing nearzero bids to manage privatisation of large public sector undertakings as a means to improve their portfolios and establish credentials in various sectors. Deloitte had recently bid ~1 to manage the privatisation of Bharat Petroleum Corporation (BPCL), and was selected.
KPMG would be required to advise the government on the modalities and the timing of the disinvestment, and prepare a scheme to successfully implement the sale. It will have to execute a non-disclosure agreement and provide appropriate information to bidders.
Besides this, KPMG will finalise the sale process through bidding or auction, and assist the government in fixing the reserve price considering the valuation of IDBI Bank.
The government is looking to sell its 45.48 per cent shareholding in IDBI Bank. Life Insurance Corporation of India (LIC), which owns 49.24 per cent, will also offload its stake to transfer management control to the new buyer.