Government Plans Financial Bids for IDBI Bank by Year-End
By Shailesh Yadav
New Delhi, India – 31 July
Tuhin Kant Pandey, Secretary of the Department of Investment and Public Asset Management (DIPAM), announced that the government aims to receive financial bids for IDBI Bank by the end of the financial year. In an interview, Pandey explained that the process will move to due diligence in early August and involves several steps, including regulatory approvals and addressing employee benefits.
Pandey highlighted that strategic disinvestment is a time-consuming process requiring management control to shift to strategic buyers. This involves a two-stage bidding process, starting with an Expression of Interest (EOI) followed by due diligence, negotiation of share purchase agreements, and financial bidding. Issues like real estate separation and employee benefits need to be resolved before proceeding.
Regarding the Shipping Corporation of India (SCI), Pandey noted that documentation and employee trust issues need to be resolved before moving to financial bidding. On PSU banks’ disinvestment, he mentioned that it is not currently pursued due to the lack of necessary legislation.
Pandey emphasized the government’s broader public asset management strategy, focusing on value creation for public enterprises rather than maximizing dividends. He concluded that consistent dividends are preferred to ensure enterprises have resources for growth.
Doubts Revealed
IDBI Bank -: IDBI Bank is a bank in India that provides financial services like loans and savings accounts to people and businesses.
Tuhin Kant Pandey -: Tuhin Kant Pandey is an important government official in India who works on managing the country’s investments and public assets.
DIPAM -: DIPAM stands for the Department of Investment and Public Asset Management. It is a part of the Indian government that handles the sale and management of government-owned assets.
Financial bids -: Financial bids are offers made by companies or individuals to buy something, in this case, a part of IDBI Bank.
Due diligence -: Due diligence is a careful check done by buyers to make sure everything is okay before they buy something, like a bank.
Regulatory approvals -: Regulatory approvals are permissions needed from government authorities to make sure the sale follows all the rules and laws.
Employee benefits -: Employee benefits are extra perks given to workers, like health insurance or retirement plans, which need to be considered during the sale.
Strategic disinvestment -: Strategic disinvestment means the government is selling its shares in a company to private investors to improve efficiency and raise money.
Shipping Corporation of India -: The Shipping Corporation of India is a government-owned company that operates ships for transporting goods and passengers.
Public asset management -: Public asset management is the process of managing government-owned properties and investments to make sure they are used well and generate value.
Maximizing dividends -: Maximizing dividends means trying to get the highest possible payments from investments, but in this context, the focus is on creating long-term value instead.
