Govt stake in IDBI Bank to go above 70%

The Government's stake in IDBI Bank could go above 70 per cent as the former is agreeable to convert its investment in the bank's bonds into equity.

Currently, the government has 65 per cent stake in the public sector bank.

IDBI Bank has notified the BSE that the Government has informed it that they are agreeable, in principle, to convert the Tier-1 bonds of Rs 2,130.50 crore issued to Government by IDBI Bank into equity share capital of the bank, subject to all regulatory and statutory requirements.

“The bonds were maturing in 2022 and carried a weighted average interest rate of 9.77 per cent. Post conversion of the bonds into equity, the government's shareholding in the bank could go above 70 per cent,” said Mr P. Sitaram, Chief Financial Officer, IDBI Bank.

kram@thehindu.co.in