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Informist, Friday, Mar. 13, 2026

--Govt source: Opened financial bids for IDBI Bank privatisation

--Govt source: Fincl bids for IDBI Bank privatisation below reserve price

NEW DELHI - The government's much-touted IDBI Bank privatisation plan has come to a halt as the financial bids received are below the reserve price set for the transaction, a senior government official said Friday. The official, however, did not disclose the reserve price set for the transaction. 

The reserve price is the minimum price sought to carry out a transaction involving sale of shares. This development technically means that the government will have to re-draw the privatisation plan for the bank and repeat the entire process again.

Informist had reported Monday that Canada's Fairfax Financial and the UAE's Emirates NDB have submitted bids to buy the government's 30.48% stake and the Life Insurance Corp. of India's 30.24% stake in IDBI Bank. Both the suitors have experience in acquiring banks in the Indian banking sector, with Emirates NDB recently acquiring RBL Bank and Fairfax Financial already holding 40% stake in the old private sector lender CSB Bank. Earlier, Kotak Mahindra Bank was the preferred suitor to acquire the stake in IDBI Bank, but it had informed exchanges on Feb. 7 that it had not submitted a financial bid.

Currently, the government holds 45.48% stake in the bank, and LIC, the promoter, holds 49.24%. After the proposed strategic sale, the government's stake was to come down to 15%, and LIC's to 19% in the bank.

Informist had also reported that rising tensions in West Asia have led the finance ministry to re-prioritise its focus areas, pushing down IDBI Bank privatisation lower in the pecking order at the moment. The progress in undertaking the transaction was also impacted due to the current volatility in the stock market, as the government wanted to get the best value for its stake sale in the bank, the official had said. 

Now that the financial bids are below the reserve price, likely due to current market conditions, the government is set to face defeat in its privatisation plan yet again. If IDBI Bank was privatised, it would be only the second strategic disinvestment the government has succeeded in after Air India. It would have also been the government's first successful bank privatisation. 

The government had sought initial bids from interested investors for IDBI Bank in October 2022. Since then, the bank's share price has doubled to INR 92.20 on Friday. The halt in the transaction also complicates the government's finances as it had pinned its hopes on successfully concluding the transaction in 2026-27 (Apr-Mar) while setting an ambitious miscellaneous capital receipts target of INR 800 billion for FY27, more than double the target of INR 338.37 billion for this year.  End

Reported by Priyasmita Dutta 

Edited by Avishek Dutta

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