June 2013
M T W T F S S
« May   Jul »
 12
3456789
10111213141516
17181920212223
24252627282930

Contact us

IDBI offers to sell Stock Holding Corporation of India stake

Public sector lender IDBI Bank that had mounted a bid to merge Stock Holding Corporation of India (SHCIL) with itself has now approached the government, seeking permission to sell its stake in the country’s largest custodial and depository services firm to state-owned non-banking finance company IFCI.

The move comes in the wake of the finance ministry is reluctance to allow SHCIL to merge with IDBI Bank. TOI was the first to report on May 13 that the government was against the move.

Sources said that IDBI Bank could walk away with a net profit of around Rs 400 crore if the government allows it to sell its 18% stake to IFCI, which is learnt to have been against the merger proposal. IFCI currently holds a 34% stake in the company and was earlier keen on increasing its holding.
But even IFCI, where the government last year converted its debt into equity and acquired majority stake, may find it tough to push through its agenda, sources indicated. In the absence of any decision, the state of flux would remain at Stock Holding Corporation, which has seen as sharp fall in profit amid the change at the top and uncertainty in its holding.

Sources said that IDBI Bank is keen to ensure a decision one way or the other to end the uncertainty as it believes that no one is benefiting with the current situation.

There were reports of Life Insurance Corporation of India too showing interest to sell its stake to Blackstone, sources indicated that it won’t be easy given that IFCI by virtue of its shareholding has a veto power and can block the move. Besides, the shareholders’ agreement gives existing shareholders the first right of refusal.
Source: Times of India

Leave a Reply

You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>