IDBI Bank Prepares To Sell A Chunk Of Non-Core Assets To Raise Capital

With almost a quarter of its loans having turned bad, IDBI Bank Ltd. is preparing for a garage sale of sorts, through which it hopes to raise capital to clean-up its books. The proceeds of these sales would, however, help the bank only marginally given that it has accumulated over Rs 50,000 crore in bad loans.

The state-owned lender has identified five non-core investments, in which it will sell stake as part of its asset monetisation plan, KP Nair, deputy managing director at IDBI Bank told BloombergQuint in an interaction.

These companies include:

  • IDBI Federal Life Insurance Company
  • IDBI Asset Management Ltd
  • IDBI Trusteeship Services Ltd
  • National Securities Depository Ltd (NSDL)
  • NSDL e-Governance Infrastructure Ltd.

The bank is in the process of appointing advisers who will help with the sales.

We will be putting requests for proposal soon and will appoint advisers shortly. The sale process should be completed latest by June 2018.

KP Nair, Deputy Managing Director at IDBI Bank

In an analyst call in June, IDBI Bank’s chief executive officer Mahesh Kumar Jain had said that the bank was looking to raise Rs 5000 crore through non-core asset sale. However, once the advisers are appointed and the sale process begins, the bank will have a better idea of the valuation, Nair added, without committing to an amount that can be raised through asset sales.

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