IDBI Bank sale to be ease

Ahead of the January 7 deadline for submission of expression of interest (EoI) for IDBI Bank, the Centre on Tuesday tweaked regulations to exempt listed companies like it in which the government and public sector undertakings (PSUs) together or individually hold majority stake from the minimum public shareholding (MPS) norm.

The exact period of MPS exemption for IDBI Bank would be known to shortlisted bidders when the government shares the draft share purchase agreement (SPA) with them.

The MPS exemption would continue to be valid for the period specified, irrespective of any change in control of such listed entity after issuance of such exemption, the government said in a Gazette notification.

According to the market regulator Sebi norms, a company is required to have a MPS of 25% within one year of the merger with/acquisition of a company or three years after listing.

Many large profit-making CPSEs like Oil and Natural Gas Corporation and Indian Oil have valuable listed subsidiaries or JV partnerships. ONGC’s subsidiaries include HPCL and Mangalore Refinery & Petrochemicals. IOC’s major investments’ include Chennai Petroleum Corporation and Petronet LNG (a JV with other state-run oil firms). Most public sector banks including the State Bank of India have multiple listed subsidiaries as well.