Why Govt Must Press Ahead With IDBI Divestment The fate of IDBI’s divestment remains uncertain as of March 2026, with bids from known bidders—Emirates NBD and Fairfax—falling below the government’s reserve price for a 60% stake sale. This has raised concerns that the current round may be canceled. However, the article argues that the government must persist with the divestment despite challenges. The NDA government has been working on IDBI’s disinvestment for over a decade, yet the process remains incomplete. Finance Minister Arun Jaitley first announced the plan in his 2016 budget speech, but as of 2026, progress has stalled. This contrasts sharply with the successful divestment of smaller banks like RBL and Yes Bank, which attracted foreign institutional investors just six months prior. Comparisons highlight IDBI’s potential. As of December 31, 2025, IDBI’s return on equity (ROE) stood at 14.5%, and its return on assets (ROA) was 1.83%, outperforming RBL and Yes Bank. RBL’s ROA was 0.53% and ROE 4.93% at the time of its stake sale, while Yes Bank’s ROA was 0.8% and ROE 5.4%. Despite these lower metrics, RBL and Yes Bank managed to secure significant investments—Rs 26,850 crore and Rs 15,880 crore, respectively. The government’s reserve price for IDBI likely reflects a valuation closer to 2 times book value, given the higher ROE and ROA. However, IDBI faces unique challenges. A buyer acquiring a 60% stake would only gain 26% voting rights, limiting control over key decisions. The remaining 40% would be held by the government and LIC, which could lead to conflicting priorities. Former Bank of Baroda Chairman S S Mundra noted that the government might prioritize fiscal considerations, while LIC seeks higher returns for investors, creating uncertainty for bidders.#govt #emirates_nbd #fairfax #idbi #arun_jaitley
India to Scrap Bids for Majority Stake in IDBI Bank, Source Says India will abandon the bids it received for a majority stake in IDBI Bank, according to a government source, as the offers fell below the minimum price the government had set for the sale. The decision comes after the Indian government and the state-owned Life Insurance Corporation of India (LIC) initiated a process to sell 60.7% of the bank in 2022. The government currently owns 45.48% of IDBI Bank, while LIC holds 49.24%. The sale process was halted because the bids received were deemed insufficient, with the source stating that the offers did not meet the so-called reserve price, or the minimum sale price, established for the transaction. Bloomberg News was the first to report the development. The government may restart the process when market interest in acquiring the bank improves and there is stronger demand from potential buyers, the source added. IDBI Bank and the finance ministry did not immediately respond to a Reuters request for comment outside regular business hours. Reuters had previously reported that the planned sale of IDBI Bank had attracted interest from Canadian investment group Fairfax Financial and Dubai-based Emirates NBD. However, the tepid response from foreign investors contrasts with recent strong bids from international entities, such as Emirates NBD’s $3 billion purchase of a 60% stake in RBL Bank and Sumitomo Mitsui Banking Corp’s acquisition of a 24% stake in Yes Bank. The government’s decision to abandon the sale highlights the challenges in securing a satisfactory price for state-owned assets, particularly in a market where investor appetite for such deals remains limited.#india #idbi_bank #life_insurance_corporation_of_india #emirates_nbd #fairfax_financial
IDBI Bank share price tumbles 14% as strategic sale likely scrapped; what we know so far Shares of IDBI Bank plummeted by 14% in early trading on March 16, 2026, hitting a low of ₹79.25 per share on the National Stock Exchange. The sharp decline followed reports that the strategic sale of the bank’s 60.72% stake, which had been under consideration since October 2022, may be scrapped. The financial bids submitted by potential buyers were reportedly below the reserve price set by the inter-ministerial group overseeing the disinvestment process. The government and Life Insurance Corporation of India (LIC) had jointly sought to sell 60.72% of IDBI Bank, with the government aiming to divest 30.48% and LIC 30.24%. An Expression of Interest (EoI) was floated in October 2022, and bids were received by February 6, 2026. However, the bids fell short of the reserve price, leading to the cancellation of the sale. Prem Watsa’s Fairfax Group and Emirates NBD were among the bidders, but their offers did not meet the required threshold. Currently, the government and LIC collectively hold 94.71% of IDBI Bank, with the government owning 45.48% and LIC holding 49.24%. The proposed sale would have reduced their combined stake to 33.99%. The disinvestment plan was part of broader efforts to reduce public sector stakes in banks and improve financial efficiency. The strategic sale process began in October 2022, with the government and LIC inviting bids for the 60.72% stake. In January 2023, the government announced it had received multiple preliminary bids, which were then evaluated for security clearance by the Ministry of Home Affairs and a "Fit and Proper" assessment by the Reserve Bank of India (RBI). Shortlisted bidders underwent due diligence before finalizing their offers.#reserve_bank_of_india #idbi_bank #life_insurance_corporation_of_india #fairfax_group #emirates_nbd
