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The Finance Ministry invited expression of interest (EoI) for strategic disinvestment in IDBI Bank, a move which would allow sale of a joint stake of the government and LIC of up to 60 per cent in the bank.
As per the bid details issued by the Department of Investment and Public Asset Management (DIPAM), LIC will cut its stake in IDBI Bank to 19 per cent from 49.2 per cent, while the government will cut its share to 15 per cent from 45.5 per cent at present.
According to the conditions of the EoI, private sector banks, non-banking finance companies (NBFCs), foreign banks and even alternative investment funds registered by SEBI can bid for IDBI Bank.
The successful bidder has been mandated to scale down equity to 26 per cent in 15 years.
However, in the first five years starting from the date of acquisition, 40 per cent of equity capital would remain captive or locked, according to RBI guidelines.