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    Sebi allows reclassification of govt’s stake in IDBI Bank as 'public' post sale

    Synopsis

    The consent has been given on the condition that the government’s voting rights in the lender should not exceed 15% of the total voting rights of the bank, IDBI Bank said in a release

    India's SEBI allows govt stake in IDBI Bank to be reclassified as public post saleReuters
    The Securities and Exchange Board of India (Sebi) has given consent to reclassify the government’s stake in IDBI Bank as 'public' after the strategic disinvestment.

    The consent has been given on the condition that the government’s voting rights in the lender should not exceed 15% of the total voting rights of the bank, IDBI Bank said in a release.

    The government owns 45.5% stake in the public sector lender, and Life Insurance Corporation of India holds a 49.24% stake. LIC is currently the promoter of the bank. The government plans to divest a 30.5% stake in IDBI Bank and LIC will sell a 30.2% stake.

    The government's intent to reclassify its shareholding as "public" must be specified in the offer document when the new acquirer makes an open offer to the lender’s public shareholders, the market regulator said.

    Further, the government has requested Sebi to treat its residual stake in IDBI Bank as a financial investment since it would not exercise any control over the bank or have any special rights. The government will also not have any representation on the bank's board.

    Sebi has also directed the new acquirer to comply with the minimum public shareholding norms within a year of the sale. Reclassification of the government's balance stake in IDBI Bank as 'public' will make it easier for the buyer to meet the mandatory 25% minimum public shareholding norm.

    The reclassification will take the total public shareholding in the bank to 20.29% from the current 5.29%. In October, the Centre had invited expressions of interest for the privatisation of IDBI Bank.

    The Centre aims to raise Rs 65,000 crore through divestment in 2022-23 (April-March), of which, it has raised about Rs 31,100 crore so far.

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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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