IDBI Bank Privatisation Back On Track As Govt Explores Revival Of Below-Reserve Bids

The central government is looking for a way to get the IDBI Bank stake sale moving again. The process hit a wall in March when bids from two interested parties came in below the undisclosed reserve price, but officials say the process was never formally abandoned and that work is ongoing to find a path forward.

People familiar with the matter said the government is reviewing legal provisions within the tendering framework that could allow bids below the reserve price to be accepted under certain conditions.

The two bids still under consideration were submitted by Fairfax Financial Holdings, the Canadian investment firm led by Prem Watsa, and Emirates NBD, the Dubai-based banking group. Both are still treated as alive within the process.

A decision is expected soon. The government has set an ₹80,000 crore asset monetisation target for the current fiscal year and needs transactions of this scale to move.

What Happened In March

When financial bids came in below the reserve price, IDBI Bank’s stock saw a sharp fall. The stock dropped from its 52-week high of ₹118.45 to ₹61.05 on 30 March on the Bombay Stock Exchange.

Since then, it has recovered some ground. On 29 May 2026, IDBI Bank shares closed at ₹73.83 hitting an intraday high of ₹76.19.

A senior official was direct about the status of the process. It was never scrapped. Multiple options are being examined to complete the current round rather than restart from scratch.

The government may also bring in the Securities and Exchange Board of India for guidance, given that IDBI Bank's public float currently sits at just 5.29%, a figure that raises its own valuation complexities.

The Numbers And Regulatory Clearances

The government holds a 30.48% stake in IDBI Bank. Life Insurance Corporation of India owns another 30.24%. Together, the two sellers are looking to offload a combined 60.72% stake. At the current market price, that package is worth around ₹24,000 crore.

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The winning bidder will need approval from multiple regulators. This includes a “fit and proper” check by the Reserve Bank of India and clearance from the Competition Commission of India. They will also need to make an open offer to minority shareholders under takeover rules.

Sources:

The Economic Times

Money Control