mumbai idbi bank is likely to merge its housing finance subsidiary idbi homefinance with itself after the board of the bank decided to indefinitely postpone the plan to sell the company in its last board meeting held on january 23 the government nominee arun ramnathan asked idbi to defer its sale of idbi homefinance without citing any particular reason insiders said that while mr ramnathan who is also finance secretary did not attend the board meeting himself he wrote to the board asking it to defer the proposal to sell idbi homefinance without giving any reason when contacted by et idbi officials declined to comment on the issue idbi bank had shortlisted three bidders dewan housing finance company tata capital and religare for the sale of its whollyowned subsidiary and the board was to take a final call on selecting the winner in the january meeting industry sources said that dewan housing was likely to acquire the company since it had emerged as the highest bidder offering rs 311 crore against rs 211 crore by tata capital and rs 208 crore by religareidbi has conveyed to the three shortlisted companies that the sale of idbi homefinance has been put on hold officials from each of the three shortlisted companies told et in all likelihood it idbi homefinance would be merged with idbi on a standalone basis there is no point in competing with the subsidiary for the same market said idbi officials an official close to the development said that the sale may have been put on hold largely due to political reasons the government may not want to be seen selling a company to private players just before the elections they may also be worried about layoffs that could occur soon after the sale particularly at a time when the government is persuading the private sector to refrain from such activities said the official interestingly idbis exposure to idbi homefinance could also have thrown a spanner in the sale process idbi bank had extended over rs 2000 crore to idbi homefinance at a concessional rate post the sale idbis exposure would have been taken over by the acquiring company as a precondition to bidding idbi had given bidders an option either to prepay the loan or get it refinanced within oneyearalternatively the acquirer could pledge with idbi those assets which it idbi homefinance had financed with the loan it had taken from idbi the bank has already lent over rs 300 crore to dewan housing if dewan housing were to emerge as the winner idbis exposure to the group would be high