The Indian Govt, yesterday allowed a consortium of foreign funds and investment firms to own more than 51% in IDBI Bank.
As per the current RBI rules, there is a restriction on foreign ownership in new private banks but the Department of Investment and Public Asset Management clarified that this would apply only to new private banks and will not apply for an existing bank like IDBI Bank.
The Govt, along with RBI said that it would also consider relaxation of rhe 5-year lock-in period for shares if a non-banking financial company is merged into IDBI Bank.
All this is being done now as the deadline for submitting the EoI for a majority stake in IDBI Bank expires in four days, 16th Dec.
News floating around is that Carlyle Group, Fairfax Financial Holdings, and DBS Bank are considering to bid for at least 10% each in IDBI Bank. It seems that this time around, Govt has seen significant interest from buyers willing to offer its minimum target value of over $4.3 billion for up to 63% of IDBI Bank.
IDBI Bank, post this news, naturally hit a new high at Rs.60.50 though volumes are now muted; the stock continues to trade around Rs.59 levels currently.