Govt tweaks norms to aid IDBI Bank’s privatisation

Under the amended Securities Contracts Rules, which take impact instantly, such firms won’t want to be sure that their non-promoter shareholding is no less than 25% over a time frame, as required for different listed firms. 

“The central authorities might, in public curiosity, exempt any listed entity by which the central authorities or state authorities or public sector firm, both individually or in any mixture with others, maintain instantly or not directly, majority of the shares or voting rights or management of such listed entity, from any or the entire provisions of this rule,” the finance ministry said in a notification. The exemption will remain valid for a specific period irrespective of any change in control of the entity, it said. 

The change means a profitable bidder for IDBI Bank wouldn’t want to adjust to the minimal public shareholding norms issued by the Securities Exchange Board of India (Sebi) that mandates listed entities to be sure that public shareholding of their firms will increase to 25% over time. The final date for submitting expressions of curiosity for IDBI Bank is 7 January. 

The authorities and Life Insurance Corp. of India goal to promote greater than 60% stake of their holding within the financial institution to a personal entity and hand over administration management of the financial institution to the profitable bidder after the disinvestment course of concludes.