“IDBI Bank Reveals ₹11,520 Crore Deferred Tax Assets, 120 Properties in 7 Cities in Advance of Strategic Sale”
The Indian government reveals that IDBI Bank possesses ₹11,520 crore in deferred tax assets and 120 properties in key cities, as the bank’s strategic sale process advances.
In a significant development, the Indian government has disclosed that IDBI Bank, which is currently undergoing a strategic sale, possesses ₹11,520 crore in deferred tax assets and a portfolio of 120 properties located in seven major cities. This revelation was made in response to pre-bid queries from prospective asset valuers appointed for the IDBI Bank’s strategic sale. Here are the key highlights of the disclosure:
- Extensive Property Holdings: IDBI Bank’s property portfolio is spread across the top seven cities in India. The bank has a substantial presence with 68 properties in Mumbai, 20 in Pune, nine in Chennai, seven in Ahmedabad, six in Kolkata, and five each in Delhi and Hyderabad.
- Deferred Tax Assets: The bank’s balance sheet includes deferred tax assets amounting to ₹11,520 crore. Deferred tax assets are typically associated with overpaid taxes that can be adjusted against future tax liabilities.
- Comprehensive Asset Valuation: The government has instructed the asset valuers to conduct a thorough valuation not only of the tangible assets but also the intangibles that are not present on IDBI Bank’s balance sheet. These intangibles include items like the brand name and branch network.
- Significance of Seven Cities: The properties in these seven cities account for a substantial 94% of the total written down value of IDBI Bank’s fixed assets, taking into account depreciation. Physical fixed assets such as land and buildings constitute only about 3% of the bank’s total assets.
- Ongoing Strategic Sale: The government, in collaboration with LIC, is in the process of selling a significant 61% stake in IDBI Bank. The strategic sale has garnered multiple Expressions of Interest (EoI). To facilitate this sale, the government is currently seeking an asset valuer to assess the bank’s assets comprehensively. The deadline for asset valuers to submit their bids is set for October 30.
- Clearing Regulatory Hurdles: To proceed with the sale, bidders must obtain security clearance from the government and meet the “fit and proper” criteria stipulated by the RBI. This is crucial for moving forward to the due diligence phase and the subsequent invitation of financial bids.
Upon the successful completion of this strategic sale, the government’s stake in IDBI Bank will be reduced from the current 94.72% to 34%, with LIC also holding a 34% stake. This development marks a pivotal moment in the ongoing restructuring and privatization efforts within the Indian banking sector.
Sources By Agencies
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