India's disinvestment or DIPAM Secretary has denied news reports of there being delays in the planned stake sale in IDBI Bank, saying that the process is on track as per definition. He called the reports misleading, speculative and baseless.

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The report earlier indicated that market volatility and the weakness in IDBI Bank’s stock would mean a much higher dilution of the government’s stake. The government may get a lower value from the stake sale than what it expected earlier. In such a circumstance, the government is thinking of putting the divestment plan on hold.

The government, which owns 45.48 percent stake in IDBI Bank, is looking to divest a 30.48 percent stake in the lender, with state-owned Life Insurance Corp of India (LIC), which will sell a 30.24 percent stake from its holding of 49.24 percent in the bank.

Initial bids were received in January from multiple bidders. Financial bids for IDBI Bank will be called only after due diligence, DIPAM Secretary Tuhin Kanta Pandey told CNBC-TV18 in January.

The IDBI Bank divestment is the Narendra Modi government’s first privatisation plan within the banking space. The government, along with LIC expect to fetch $4 billion via the stake sale.

At the current market price, the government and LIC can raise a maximum of $3 billion from the divestment of 60.68 percent.

Shares of IDBI Bank are off the day's low, currently trading 3 percent higher at Rs 45.75. The stock is down 17 percent so far this year, and has corrected nearly 30 percent from its 52-week high of Rs 62.

(Edited by : Hormaz Fatakia)

First Published:Mar 17, 2023 1:00 PM IST