IDBI Bank privatisation further delayed with Concor and Hindustan Zinc

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Strategic disinvestment of IDBI Bank may be further delayed as RBI is yet to examine ‘fit and proper’ criterion for all the bidders. At the same time, privatisation of Concor and the government’s residual stake sale in Hindustan Zinc too are in the slow lane.

“IDBI Bank is first of a kind strategic disinvestment of a bank which is owned by one government-owned entity while government itself owns a good number of shares (LIC holds 49.24 per cent, while the government has 45.48 per cent in IDBI Bank). That could be reason why RBI is taking time to complete procedure for examining bidders on fit and proper criteria,” a senior government official told businessline. After that, there will be due diligence, which will be followed by financial bids.

Earlier, the government was hoping that strategic disinvestment of IDBI Bank will be completed during the second half of the current fiscal. However, no deadline is being offered now. In the strategic disinvestment of IDBI Bank, the preliminary information memorandum (PIM) for inviting an expression of interest (EOI) was published on October 7, 2022. It was mentioned that the government will sell 30.48 per cent and LIC will divest 30.24 per cent, aggregating to 60.72 per cent, along with a transfer of management control to IDBI Bank.

Other CPSEs

Yet to pick up momentum is privatisation and disinvestment of other CPSEs and the residual stake sale in Hindustan Zinc. Officials expect that post-election things will gather pace. Talking about Concor (Container Corporation of India), the official said: “The new government will take a call on issuance of EoI.” In fact, ‘in principle’ approval of CCEA has been granted for strategic disinvestment of Rashtriya Ispat Nigam Ltd (RINL) and subsidiaries of AI Asset Holding Ltd. (AIAHL) [formerly subsidiaries of Air India], but EoIs are yet to be issued.

On the strategic disinvestment of Shipping Corporation of India (SCI), the official said SCILAL (Shipping Corporation of India Land and Assets Ltd.) has to be listed. Considering the election, there is some delay in completing administrative work, the official said. Once these processes are over, a financial bid will be invited. So, the strategic disinvestment process is likely to be over in the next few months.

Continuity

On the residual stake sale in Hindustan Zinc, an official of the Mines Ministry said post “some stability in the markets”, the disinvestment process could be kick-started. “If there is continuity in government, there will be some stability in the stock markets post June 4. It would help quicken the disinvestment process,” a Ministry official said, requesting anonymity. Market surveys are on, and recently (around April) a roadshow for investors took place.

The Government holds 29.54 per cent stake in Hindustan Zinc, while Vedanta owns the majority 64.92 per cent. Also on the disinvestment radar are RINL and NMDC’s steel unit (NMDC Steel).

While the Railways have taken over and started operations at the forged wheel unit of RINL, land parcels of the steel-maker are being monetised. In case of NMDC Steel, the plan is to start the disinvestment process once the company turns EBITDA positive and there is some write-down of debts from its books, a source said.