IDBI Bank Privatization Reaches New Milestone as Centre Considers Legal Pathways

Government Explores Options to Revive IDBI Bank Privatisation Process

The Centre is examining possibilities to revive the stalled privatisation process of IDBI Bank, The Economic Times reported, citing individuals familiar with the matter. The government is studying whether previously rejected bids submitted by Fairfax Financial Holdings and Emirates NBD can still be considered, despite failing to meet the reserve price threshold.

According to sources, the bids are still considered "alive," with officials studying legal provisions within the tendering framework that may allow acceptance of offers even if they fall below the reserve price. The reserve price has not been disclosed publicly, but the government is expected to take a call soon as it seeks to strengthen non-tax revenue collections.

A senior government official stated that the privatisation process was never formally scrapped even after the financial bids were found to be below the reserve price. The official added that multiple options are under consideration to complete the transaction within the current round itself. The government had reportedly fixed the reserve price after interested bidders submitted their financial offers but before the bids were opened.

Read also: SpaceX Seeks Record $75 Billion IPO, Potentially Positioning Elon Musk as the World's First Trillionaire

The Centre may also consult the Securities and Exchange Board of India (SEBI) regarding valuation-related concerns due to IDBI Bank's limited public float, which currently stands at 5.29 per cent. All aspects linked to the transaction are being reviewed, according to another official.

In February 2026, DIPAM Secretary Arunish Chawla posted on X that financial bids for the strategic disinvestment of IDBI Bank had been received and would be evaluated under the prescribed procedure. However, The Economic Times noted that the stake sale process slowed in March after the bids were found to be below the reserve price. Following the development, IDBI Bank shares dropped sharply from their 52-week high of Rs 118.45 to a 52-week low of Rs 61.05 on March 30 on the BSE.

The stock later recovered some ground in April and was trading at Rs 73.49 on the BSE at the time of reporting. The government plans to divest its 30.48 per cent stake in IDBI Bank, while Life Insurance Corporation of India (LIC) intends to sell its 30.24 per cent holding. At the current market price, the stake sale could fetch nearly Rs 24,000 crore, The Economic Times reported.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

The government has budgeted Rs 80,000 crore from asset monetisation during the current fiscal year. As part of the transaction process, the successful bidder will have to undergo a final assessment by the Reserve Bank of India (RBI) to satisfy the regulator's "fit and proper" criteria. The Economic Times reported that additional approvals would also be required from statutory and regulatory authorities, including the Competition Commission of India (CCI).

The winning bidder will also need to comply with open offer requirements for minority shareholders of IDBI Bank.