IDBI Bank shines bright
IDBI Bank has been the top gainer since the morning today, rising over 9% to an intraday high at Rs.59.75, not too far from its 52-week high of Rs.61.05, hit on 15th Dec’22.
To facilitate a quick and easy strategic divestment for the stakes held by the Govt as well as LIC, SEBI has agreed to the Govt’s request of re-classifying its holding in the bank as “public” post the disinvestment.
After completion of the strategic disinvestment, IDBI Bank has to make an application to the stock exchanges for re-classification of government holding under public category. Also the new acquirer has to ensure compliance with minimum public shareholding requirements within a period of one year from completion of open offer.
This re-classification is essential to entice the potential buyers that the Govt will be adopting a strict “hands-off” attitude after its stake sale; no remote or direct control. Govt’s stake in the Bank is at 45.48% and that of LIC ay 49.24%.
SEBI put a caveat along with this nod, putting forth two conditions that need to be fulfilled – firstly, voting rights of the government shall not exceed 15% of the total voting rights of the bank and secondly, intention of the govt to get its shareholding re-classified as public holding shall be specified in the letter of offer dispatched to the shareholders of the bank in connection with the open offer made by the new acquirer.