Govt cancels bid for appointing asset valuer for IDBI Bank, fresh RFP to be issued

• The Indian government has canceled the bidding process to hire an asset valuer for its planned IDBI Bank share sale, according to a statement. 
• The government will invite fresh bids to select a valuer for its stake in the lender, according to a statement from the Department of Investment and Public Asset Management on Tuesday. 
• The government gave no reason for the move. 
• India is looking to offload its 30.48% stake in IDBI Bank, while Life Insurance Corp of India will sell a 30.24% shareholding. Presently, the Indian government and LIC collectively own about 95% of IDBI Bank. 
• The government, along with LIC, is selling nearly 61 percent stake in IDBI Bank and in January received multiple Expressions of Interest (EoIs) for the same. 
• The Indian government is not expecting to conclude the sale of IDBI Bank by the end of the current financial year on March 31, 2024 

The government on Tuesday cancelled the bid process for the appointment of an asset valuer for strategic sale-bound IDBI Bank on low bidder interest. A fresh Request for Proposal (RFP) would be invited soon after a review of some of the bid criteria to enable better interest from bidders. It has been decided with the approval of the competent authority to cancel the present RFP and to issue a fresh RFP for selection of an asset valuer for strategic disinvestment of IDBI Bank Ltd," DIPAM said in a corrigendum.

The government, along with LIC, is selling nearly 61 percent stake in IDBI Bank and in January received multiple Expressions of Interest (EoIs) for the same.

Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey had last week said the IDBI Bank strategic sale transaction is "on course" but the transaction would not be completed in the current fiscal. "We practically don't think that before March we can conclude it (IDBI Bank stake sale)," Pandey had said.

As part of the strategic sale process, on September 1, DIPAM invited bids for appointing an asset valuer and the last date for submission of bids was October 9. The deadline was later extended to October 30. The asset valuer was mandated to identify intangibles not on the IDBI Bank balance sheet, like brand name, and branch network, and value them.

The terms of reference for asset valuers included describing and listing all the properties and assets, including intangibles such as trademarks, and title to property rights being valued, as provided by the bank. Valuation of intangibles was required to be indicated separately.

The DIPAM had earlier said the bank has 120 properties in the top seven cities. These include 68 properties in Mumbai, 20 in Pune, nine in Chennai, and seven in Ahmedabad. Besides, it has six properties in Kolkata and five each in Delhi and Hyderabad. The asset properties in the seven cities account for 94 percent of the total written-down value (after accounting for depreciation) of fixed assets of IDBI Bank. The government and LIC together hold 94.72 percent stake in IDBI Bank.

Pursuant to the strategic sale transaction, the government will own 15 percent stake and LIC 19 percent shareholding in IDBI Bank, taking their total holding to 34 percent.

 

(With inputs from agencies)