Govt to invite financial bids for IDBI Bank by Dec; LIC, select PSB minority stake sales also on cards

The government plans to invite financial bids for the strategic divestment of IDBI Bank between October and December this year, with the aim of selecting the successful bidder by the end of FY26, Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla said.

Chawla confirmed that the due diligence process for IDBI Bank has been completed and data room protocols have been completed for all qualified interested parties.

“We have also completed all formal consultations with the qualified interested parties. We hope to invite financial bids for IDBI Bank by Q3 of the current financial year,” he said.
The government is hopeful that by the end of March FY26, the selection of the successful bidder will be over, the DIPAM Secretary indicated.

The strategic sale of IDBI Bank, where the government and LIC together hold over a 94% stake, is seen as a test case for the government’s privatisation programme.

The Centre currently holds 45.48% in IDBI and LIC has 49.24%. The buyer will acquire a majority stake, with the government selling 30.48% of its holding and LIC selling 30.24% in the bank. Total dilution will aggregate to 60.72% of the equity share capital of IDBI Bank, along with the transfer of management control to the buyer.

In parallel, the government has initiated preparatory work for stake dilution through offer for sale (OFS) in select public sector banks and government-owned insurers, including LIC.

Legal advisors and merchant bankers have already been appointed for a three-year term, extendable by two years, to manage the transactions. The transaction could be initiated anytime within this three-year window, Arunish Chawla indicated.

He also said the government is actively reviewing the capital management of Central Public Sector Enterprises (CPSEs) every week, with a focus on safeguarding the economy from emerging geopolitical risks.

“CPSEs command 15% of the market capitalisation. We are working to ensure that they continue to meet their performance milestones, including the capex aimed to sustain the economic growth momentum,” Chawla added.

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