Government Likely to Restart IDBI Bank Privatisation Process from Scratch The Indian government is expected to begin the privatisation of IDBI Bank anew after the previous financial bids failed to meet the reserve price, leading to the cancellation of the earlier process. A panel of ministers overseeing the divestment will review the situation and decide on a fresh approach, according to officials familiar with the matter. The decision comes after the bids submitted by potential investors fell short of the set reserve price, prompting the government to reconsider the privatisation strategy. The privatisation process, which had been ongoing for nearly five years, is now set to start from the beginning. Officials noted that the government will examine the entire process, including the methodology used to determine the reserve price. Concerns were raised about the reliance on stock prices to fix the reserve price, particularly for banks with a limited public float, which made them vulnerable to market manipulation. The previous reserve price for IDBI Bank was based on its stock price, which had surged to a 52-week high of ₹118.38 before the bidding process began. The government currently holds a 45.48% stake in IDBI Bank, while the state-run Life Insurance Corporation of India (LIC) owns 49.24%. The remaining 5% is held by the public. Since the financial bids were scrapped, the bank’s stock price has dropped by approximately 19%, closing at ₹74.28 on the National Stock Exchange. This decline has brought the stock close to its 52-week low of ₹72, which was recorded on April 7, 2025. The government’s decision to restart the process is seen as a way to address the shortcomings of the previous attempt.#indian_government #reserve_bank_of_india #idbi_bank #life_insurance_corporation_of_india #competition_commission_of_india
