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The government’s long-delayed privatisation of IDBI Bank moved a step closer after the Department of Investment and Public Asset Management (DIPAM) confirmed that it has received financial bids for the lender’s strategic disinvestment.
In a post on its official social media handle, DIPAM said the bids would now be taken up for evaluation as per the prescribed process, without disclosing the names of the bidders. Market sources, however, indicate that Kotak Mahindra Bank and Fairfax India Holdings have emerged as key contenders.
The development follows the Centre’s invitation for financial bids earlier this year as part of the privatisation process that has been underway for more than three years. The government is targeting an announcement of the successful bidder by March 2026, though the completion of the transaction could spill over into the next financial year due to regulatory approvals and procedural requirements.
Under the proposed transaction, the Centre plans to sell its 30.48% stake in IDBI Bank, currently valued at about ₹36,000 crore at prevailing market prices. State-run Life Insurance Corporation of India will simultaneously divest a 30.24% stake, taking the total shareholding on offer to 60.72%. The combined valuation of the stake sale is estimated at close to ₹72,000 crore.
Multiple expressions of interest were received in early 2023, but the pool of potential bidders has narrowed in recent months. Emirates NBD, which had earlier featured in market discussions, has since announced plans to acquire a controlling stake in RBL Bank, making its participation in the IDBI process unlikely.
The transaction is expected to rank among the largest stake sales in India’s banking sector. Its progress also assumes significance for the Centre’s asset monetisation efforts, especially as disinvestment proceeds are now classified under “miscellaneous capital receipts.” So far this financial year, such proceeds have totalled ₹8,768 crore, highlighting the importance of large-ticket deals like IDBI Bank.
With both the government and LIC set to exit their controlling stakes, the IDBI Bank sale is seen as a landmark privatisation. The final timeline, however, will hinge on regulatory clearances, due diligence outcomes, and bidders’ readiness to close the deal.
