Govt eyes ‘control premium’ to part with its stake in IDBI Bank

The government wants a control premium to part with its holding in IDBI Bank NSE 1.51 % and is likely to retain a partial stake even after the transfer of management control, as it prepares for the lender’s divestment, multiple people familiar with its thinking said. This is because the weighted average cost of acquisition of the government’s current shareholding in the bank is much higher than the prevailing market value of its shares.

According to government and stock exchange data reviewed by ET, the government has pumped in ₹27,000 crore into IDBI Bank between April 1, 2010 and March 31, 2021. Data show the government acquired 4.5 billion shares in IDBI Bank during this 11-year period. This brings its weighted average cost of acquisition to ₹60 a share.

Source: Economic Times

Leave a Reply

Your email address will not be published. Required fields are marked *

Back To Top
%d bloggers like this: