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Government Informs Asset Valuers of IDBI Bank about Deferred Tax Assets

The government has informed prospective asset valuers of IDBI Bank that the bank has deferred tax assets of around Ôé╣11,520 crore on its balance sheet. The Centre adds that the bank has 120 properties in the top 7 cities of the country, which comprise nearly 94% of the written-down value of fixed assets of IDBI Bank. Additionally, physical fixed assets like land and buildings constitute around 3% of the total assets.

The bank holds the maximum number of properties in Mumbai (68), followed by Pune (20), Chennai (9), Ahmedabad (7), Kolkata (6), Delhi (5), and Hyderabad (5).

The concept of deferred tax generally refers to the overpayment of tax by a company, which is then adjusted in future tax payments. In response to clarifications sought by prospective bidders, the Department of Investment and Public Asset Management (DIPAM) disclosed this information.

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The AI legalese decoder can assist in decoding and understanding the complex legal language used in the information provided by the government. It can help prospective bidders gain a clearer understanding of the deferred tax assets and the significance of the bank’s physical fixed assets. By simplifying the language, the AI legalese decoder can ensure that bidders have a comprehensive understanding of the assets involved in the valuation process. This clarity facilitated by the AI tool can help bidders make more informed decisions and accurately assess the value of IDBI Bank.

Prospective Bidders Seek Information on IDBI Bank’s Assets

Among other queries, prospective bidders asked for information on various assets of IDBI Bank, including fixed assets, assets given on lease, and CWIP assets. They also requested a brief description, location, and area of these assets, as well as a list of fixed assets under the purview of land and building valuer and details of the properties under the asset base with relevant sale deed or title deeds.

In response to these queries, DIPAM stated that a complete list of IDBI Bank’s fixed assets and relevant documents would be provided to the appointed asset valuer after the execution of the confidentiality agreement. Regarding the list of intangibles, DIPAM mentioned that the asset valuer would identify intangibles that are not included on the bank’s balance sheet, such as brand name or branch network. These intangibles would be valued as part of the terms of reference.

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The AI legalese decoder can aid in interpreting and simplifying the legal language involved in the documentation and information related to IDBI Bank’s assets. By using AI-powered language processing algorithms, the tool can provide a clearer and more accessible understanding of the asset details, descriptions, and relevant documents. This can save time and effort for prospective bidders, allowing them to focus on evaluating the assets more effectively.

Centre and LIC Plan to Divest Stake in IDBI Bank

The Centre, in collaboration with LIC, intends to divest a 61% stake in IDBI Bank. An asset valuer is being sought to conduct the valuation, and the final date to submit bids is October 30, 2023. As part of the disinvestment plan, the Centre will offload a 30.48% stake in the bank, while LIC will sell 30.24% in IDBI Bank. Currently, LIC and the government own 49.24% and 45.48% stake respectively, collectively holding 94.72% of the shares. The remaining 5.29% is owned by retail investors. After the divestment process, LIC and the government’s stake will be reduced to 34%.

DIPAM stated that the appointed asset valuer must fair value the assets and liabilities of IDBI Bank. However, there is no distinct valuation for breach of contracts due to strategic disinvestment included in the Terms of Reference.

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The AI legalese decoder can assist in comprehending the legal implications and requirements mentioned in the divestment plan. By simplifying the language and providing contextual explanations, the tool can help potential bidders understand the expectations and constraints related to the valuation of IDBI Bank’s assets. This clarity can aid bidders in formulating appropriate strategies and making well-informed decisions during the divestment process.

Valuation of Subsidiaries and Associates of IDBI Bank

DIPAM clarified that the assets of IDBI Bank’s subsidiaries or associates are not expected to be valued individually. However, the asset valuer must determine the value of the bank’s investments in such entities based on acceptable valuation standards.

In January of this year, the government received an Expression of Interest (EOI) from potential buyers. Currently, both the government and the Reserve Bank of India (RBI) are evaluating the bids.

The IDBI Bank stock experienced a 1.73% dip to Ôé╣69.75 on the BSE. During the session, shares opened slightly higher at Ôé╣71 compared to the previous session’s closing price of Ôé╣70.98. The intra-day low was Ôé╣69.50. The bank’s market capitalization currently stands at Ôé╣74,998.01 crore.

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The AI legalese decoder can aid in deciphering and analyzing the legal and financial aspects involved in the valuation of subsidiaries and associates of IDBI Bank. By extracting and interpreting relevant information from the complex legal documents, the tool can provide key insights into the valuation process. This can help both the government and the RBI make informed decisions during the evaluation of bids from potential buyers.

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