Government invites bids for asset valuer for IDBI Bank, shares surge 8%

The government's invitation for bids for an asset valuer for the lender accelerated the divestiture process for IDBI Bank, sending shares of the company up 8% on Monday.

On the BSE, the stock started the day at 62.70, achieved an intraday high of 65.45 at the conclusion of trading, and then settled at 64.96, up 8.03% from its previous close of 60.13.

In order to find a "reputable asset valuer registered with the Insolvency & Bankruptcy Board of India (IBBI)," the Department of Investment & Public Asset Management (DIPAM) issued an RFP (request for proposal) on behalf of the government and Life Insurance Corporation (LIC) on Saturday. The deadline for submission of proposals is October 9.

DIPAM had said that the asset valuer would be needed to evaluate the investments, loans, advances, fixed assets, and other assets of IDBI Bank (including interests in subsidiaries, associates, joint ventures, and affiliates).

Deposits, loans, and other obligations as well as provisions are included in the bank's liabilities. The transaction adviser and legal advisor chosen by DIPAM, as well as the asset valuer, will need to collaborate closely.

According to the RFP, "The contract (for asset valuer) shall initially be valid for a period of three years from the date of issue of the appointment letter and may be extended by one additional year on existing terms and conditions."

The Cabinet Committee on Economic Affairs has given its approval in May 2021 to the strategic sale of the Centre and LIC's share in IDBI Bank as well as the transfer of managerial control.