IDBI Bank strategic sale: These 7 firms are in the race to be transaction advisor

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JM Financial, Ernst and Young and Deloitte are among the seven firms that are in the bidding race for managing the strategic sale of IDBI Bank. The firms that are bidding to be transaction advisors will have to give a virtual presentation to the department of investment and public asset management (DIPAM), which is handling the sale process on August 10.

Deloitte Touche Tohmatsu India LLP, Ernst and Young LLP, ICICI Securities, JM Financial Ltd, KPMG, RBSA Capital Advisors LLP and SBI Capital Markets are the firms that have bid for acting as transaction advisor. Only one transaction advisor would be appointed by DIPAM or the strategic sale of IDBI Bank, in which the central government and LIC together own more than 94%.

LIC has a 49.24% stake which is also having management control at present, while the government holds 45.48% in the bank. Non-promoter shareholding stands at 5.29 per cent.

The bids were invited in the month of June by the government, from professional consulting firms, investment bankers, merchant bankers, financial institutions, and banks

The last date for bid submission was July 13, which was later extended till July 22.

The role of the transaction advisor is to advise and assist the government on modalities of disinvestment and the timing.

It will recommend the need for other intermediaries required for the process of sale and disinvestment.

The advisor will also help in identification and selection of the same with proper terms of reference and preparation of all documents like Preliminary Information Memorandum (PIM), organise roadshows, and suggest measures to fetch optimum value.

The advisor would also be supporting IDBI Bank in setting up of the e-data room and assisting in the smooth conduct of the due diligence process,. They will help position the divestment of GoI equity in IDBI Bank to organize roadshows and to generate interest among the prospective buyers.

The Cabinet in May had approved the strategic sale of the entire stake of the government and LIC in IDBI Bank Ltd.