The Indian government taps TPG, Carlyle, Fairfax for IDBI Bank stake sale [buyout/ takeover]

The Indian Government is understood to have approached global buyout funds and financial institutions, such as Carlyle group, TPG Capital and love controlled fairfax Holdings, to measure investor interest in buying a majority stake held directly by the centre government and the (bail-out) lender.

The Department of Investment and Public Asset Management (DIPAM), which oversees the administration of government equity in operating companies, tapped buyout funds and bump-bracket financiers during investor roadshows held at several global banking centers, at events such as Industry sources who participated in the said.

One of the associated people said, “The talks are in the early stages and the government has not yet fixed any deadline for the stake sale.” “However, buyout funds and some domestic-related strategic investors have been excluded.”

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In addition to this, KPMG is helping with the transaction process and the proposed disinvestment of government equity in the bank has reportedly got the approval of the central bank.

DIPAM officials situated in New Delhi could not be immediately reached for their reactions. Furthermore, Carlyle, TPG and KPMG also declined to comment on the report. IDBI Bank and LIC did not comment on the matter either.

Global private equity firms are exploring the option of tying up with local strategic investors to create bidding entities. However, they can also form a consortium with other investors.

The process of issuance of Expression of Interest (EoI) will be followed by stages of formal bidding. If the current momentum in the stock markets continues, the process is expected to start this year itself.

Central Government and LIC together hold more than 94% equity Bank. The United States holding in the bank, which had the highest proportion of bad loans, is valued at over Rs41,000 crore at current market prices.

Source: India Infoline

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