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Informist, Wednesday, Jun. 10, 2026

 

--Govt sources: Open to fresh fincl bids for IDBI Bank stake sale

--Govt sources: Easier to seek revised bids from earlier bidders for IDBI Bk

--Govt sources:Substantially cut IDBI Bk reserve price to make it attractive

--Govt sources: Committed to privatising IDBI Bank, will weigh all options

By Priyasmita Dutta

 

NEW DELHI – The government is open to seeking fresh financial bids for the strategic disinvestment of IDBI Bank, two government officials said, adding that seeking revised financial bids from the two entities that had already bid for the stake is the easier option. "Government is open to additional bidders to participate in the process, but that will require fresh 'fit and proper' approvals from the Reserve Bank of India, which will likely delay the timelines," one of the officials cited above said. 

 

"But accepting fresh bids will also mean potential buyers who could not bid previously, for whatever reason, can now participate," the official said. Fairfax Financial Holdings Ltd. and Emirates NBD were the two likely bidders for the IDBI Bank privatisation, but the bids came in at a price well below the reserve price. Both the suitors have experience in acquiring banks in the Indian banking sector, with Emirates NDB acquiring RBL Bank earlier this year and Fairfax Financial already holding a 40% stake in the old private-sector lender CSB Bank.

 

The reserve price is the minimum price sought to carry out a transaction involving the sale of shares. The government aims to sell its 30.48% stake and Life Insurance Corp. of India's 30.24% stake in the bank. After the proposed strategic sale, the shareholdings of the government and LIC in IDBI Bank will fall to 15% and 19%, respectively. At 1121 IST, shares of IDBI Bank were traded 0.3% higher at INR 75.62 on the National Stock Exchange.

 

According to the official, the government has also "substantially" lowered the reserve price to capture the value of the bank against the backdrop of the current market conditions. "The lower reserve price may also make the deal more attractive for bidders," the official said. Kotak Mahindra Bank was initially interested in IDBI Bank but did not put in a bid, likely because the valuation was too high. The bank had shown expression of interest in IDBI Bank and received a fit-and-proper certificate by the central bank, but did not submit a bid.

 

"Kotak Mahindra Bank has already received the 'fit and proper' check, so it can bid without having to go for a fresh round of due diligence," the second official said. "It is always favourable to have an Indian private sector bank acquire IDBI as they are already part of the same ecosystem," the official added. 

 

The government had sought initial bids from interested investors for IDBI Bank in October 2022, and after much ebb and flow, it is yet to taste success in concluding the transaction. If IDBI Bank is privatised, it will be only the second strategic disinvestment the government has succeeded in after Air India. It will also be the government's first successful bank privatisation. 

 

At the current share price, the government may raise nearly INR 250 billion from the strategic sale of IDBI Bank, accounting for over 31% of the miscellaneous capital receipts target for 2026-27 (Apr-Mar). The government aims to raise INR 800 billion as miscellaneous capital receipts through the disinvestment of its stake in public sector undertakings and asset monetisation in the current financial year. The government discontinued the practice of giving a specific target for divestment receipts in FY25. 

 

"The government is committed to making IDBI Bank privatisation happen; all options will be considered," the first official said. Both officials unanimously said that putting a timeline on when the transaction will conclude is tough. However, a third official said that the finance ministry was drawing up the necessary plans with the intent of closing the deal by FY27.  End

 

Edited by Akul Nishant Akhoury

 

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