New Delhi: The Centre has revived the process of strategic disinvestment of IDBI Bank and is working to expedite the sale of its stake, months after rejecting financial bids that fell below the reserve price.
According to news reports, two high-level meetings involving senior officials were held on Monday to deliberate on the roadmap for the proposed transaction. Discussions primarily focused on the two qualified bidders—Canada-based Fairfax Financial Holdings, led by Prem Watsa, and Emirates NBD. Officials indicated that various aspects of the sale process are currently being fine-tuned, with greater clarity expected in the coming weeks.
The Government of India and the Life Insurance Corporation of India (LIC), which together own 94.7% of IDBI Bank, have proposed to divest a combined 60.7% stake as part of the strategic sale. The process was initiated with the issuance of an Expression of Interest (EoI) in October 2022.
The latest developments come after a panel of secretaries had earlier rejected the financial bids submitted by the qualified bidders, reportedly because the offers did not meet the government's reserve valuation. Subsequent reports suggesting that Fairfax may have submitted a revised bid fuelled optimism in the market.
Investor sentiment was reflected in IDBI Bank's share price, which surged nearly 5% during Monday's trading session before closing 2.9% higher at ₹86.50 on the BSE.
The stock had touched a 52-week high of ₹116.90 on March 2 before declining sharply to a low of ₹67.70 following reports that the initial bids had been turned down.
The renewed momentum in the IDBI Bank privatisation process comes amid the government's broader push to accelerate its disinvestment programme. In recent months, the Department of Investment and Public Asset Management (DIPAM) has largely focused on monetising small stakes in public sector banks and state-owned enterprises through the stock market.
Although the strategic sale remains at an early stage, a successful transaction would mark one of the most significant foreign investments in India's banking sector in recent years. It would also reinforce growing international investor interest in India's financial services industry.
