The IDBI Bank disinvestment process has reached a critical stage, with all data room concerns resolved and the government can move to the next stage. With due diligence almost done, it is expected that financial bids will be invited soon.
A senior government official said that the privatisation of IDBI Bank is going without a hitch. The data room resolution has eradicated any kind of obstacle that could have been there for potential bidders to contend with, and they can now proceed with their valuations and finalization of the bid. The official stressed that there were no major setbacks, there were a few queries from the potential investors which have since been addressed.
The IDBI Bank privatisation process was started in January, 2023 when the government issued an Expression of Interest (EOI). Centre and Life Insurance Corporation of India (LIC) plan to reduce their holdings from 61%: Centre plans to reduce its holding by 30.48%, while LIC intends to bring down its stake to 30.24%. It is the biggest disinvestment since the Air India sale and while officials have not ruled out the expected valuation, they haven’t mentioned it either.
The government has since June 2024 post-election Budget turned its attention from disinvestment targets to enhancing non-tax revenue collections. The DIPAM receipts for FY25 are Rs 68,263 crore, out of which disinvestment is expected to generate Rs 8,625 crore. The Union Budget 2025-26 has kept a disinvestment and asset monetisation target of Rs 47,000 crore but there is no specific allocation for IDBI Bank yet.
With a smoother transition ahead, the IDBI Bank sale is now closing in on completion and thus represents a significant shift in India’s banking sector.
