IDBI Bank shines bright

about 2 years ago

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.

85.94 (+0.08)

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