IDBI Bank Stock Extends Fall On Disinvestment Worries

IDBI Bank shares dropped another 3% on Tuesday after plunging over 17% in the previous session. This came on the back of growing concerns that the government’s strategic stake sale in the lender could stall.

The two-day fall has erased nearly ₹18,900 crore in the market value of IDBI Bank. At 12:21 pm, the bank’s market cap stood at ₹80,750.52 crore, down from ₹99,116 crore on Friday (13 March 2026). Tuesday’s decline took the overall decline of the bank’s stock to about 30% in a month.

Report Flags Lower-Than-Expected Bids

The selloff followed a report that said financial bids received for the stake sale were below the floor price set by the government. Citing sources, the report added that if the government decides to proceed, it may have to restart the bidding process.

That could delay the transaction further. The divestment process has already been underway for nearly five years.

Company Maintains Silence On Report

IDBI Bank said the divestment process remains confidential and is being handled by the Government of India. It also clarified that the stake sale is being carried out through a competitive bidding process and not through negotiations. The bank itself is not directly involved in the process.

As of 31 December 2025, the Government of India held 45.48% stake in the bank while Life Insurance Corporation of India (LIC) held 49.24% as of 17 March 2026. The plan is to sell a total 60.72% stake:

• 30.48% by the government

• 30.24% by LIC

The transaction also includes the transfer of management control.

Long-Running Disinvestment Process

The disinvestment process of IDBI Bank has been quite long. Note that:

• In May 2021, it got in-principle approval granted by the Cabinet Committee on Economic Affairs for disinvestment

• In October 2022, KPMG India was appointed as transaction advisor, and Link Legal as legal advisor

• In January 2023, SEBI approved the reclassification of government and LIC as public shareholders post-sale

Despite these steps, the deal has yet to reach closure.

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Impact On Investors

Industry watchers feel that the fall of IDBI Bank’s share price could have a negative impact on investors’ sentiment At the same time, any delay or cancellation could affect the government’s broader disinvestment plans. It could hinder the government’s asset monetisation target of ₹80,000 crore by FY27.

Source

The Economic Times