The government ANTITRUST CASE has received multiple preliminary bids for the strategic sale of a 61 per cent stake in IDBI Bank, Tuhin Kanta Pandey, secretary in the department of investment and public asset management (DIPAM), said on Saturday.

He added that the transaction will now move to the second stage in which the potential bidders will conduct a due diligence before putting in financial bids.

The government and Life Insurance Corporation are together looking to sell 60.72 per cent in IDBI Bank and had invited bids from potential buyers in October.

The last date for submitting the expressions of interest (EoI) or preliminary bids was set at December 16, which was later extended to January 7.

At present, the Centre and Life Insurance Corporation (LIC) hold 94.72 per cent in IDBI Bank.

While the government plans to sell a 30.5 per cent stake from its 45.48 per cent holding, LIC will be divesting 30.2 per cent of its 49.24 per cent stake.

Earlier, DIPAM had said that the potential buyers should have a minimum net worth of Rs 22,500 crore and must report a net profit in three out of the last five years to qualify to bid for the bank.

Further, a maximum of four members would be permitted in a consortium.

The successful bidder will also have to lock in at least 40 per cent of the equity capital for five years from the date of acquisition.

Earlier this week, the disinvestment process received a major boost when market regulator Sebi permitted the Union government to classify its stake in the bank as “public” after its stake sale on the condition that its voting rights do not exceed 15 per cent of the total voting rights.

At present, the government is classified as a co-promoter of the lender.

The intention of the government to get its shareholding re-classified as public holding shall be specified in the letter of offer dispatched to the shareholders of IDBI Bank in connection with the open offer made by the new acquirer, IDBI said citing Sebi’s letter.

Due to the reclassification, the successful bidder will be able to easily meet the 25 per cent minimum public shareholding (MPS) norm as the public shareholding will rise to over 20 per cent.

After the completion of the strategic divestment, IDBI Bank has to make an application to the bourses for reclassification of government of India’s holding under the public category, Sebi has said.

The buyer will have to comply with the MPS rule within one year of the sale.

A successful sale of IDBI Bank to a private buyer through a competitive bidding process would be first such deal in the Indian banking sector, setting the stage for more such sales in the coming years.