MUMBAI: The government’s strategic divestment of its majority stake in IDBI Bank will be completed by the end of calendar year 2025, Department of Financial Services (DFS) Secretary M Nagaraju confirmed on May 5.
“The stake sale in IDBI Bank will get completed in this calendar year,” Nagaraju said on the sidelines of the listing ceremony of India’s first residential mortgage-backed securities.
The Centre and the Life Insurance Corporation of India (LIC) are jointly selling a 61 per cent stake in IDBI Bank – comprising the government’s 30.48 per cent and LIC’s 30.24 per cent holding.
The move is part of the Centre’s broader disinvestment strategy for FY26, which targets Rs47,000 crore through asset sales.
The transaction – which had drawn multiple expressions of interest when bids were invited in January 2023 – is now progressing through advanced stages, including due diligence by shortlisted bidders.
In the race
According to officials familiar with the matter, three bidders have received all key regulatory clearances and are conducting due diligence:
- Fairfax Financial Holdings: Promoted by Canadian investor Prem Watsa, Fairfax is also the promoter of CSB Bank in India and has shown long-standing interest in Indian banking assets.
- Kotak Mahindra Bank: One of India’s leading private sector lenders, Kotak is exploring expansion through strategic acquisition and has received RBI’s nod to proceed.
- Emirates NBD: A leading UAE-based bank with operations in India, Emirates NBD has also been cleared by both the Reserve Bank of India (RBI) and the Ministry of Home Affairs for participation in the sale.
On April 9, DIPAM Secretary Arunish Chawla had noted that key procedural steps such as data room access and asset valuation were already in motion.
The IDBI Bank sale is expected to be one of the most significant contributors to the Centre’s disinvestment receipts in the upcoming financial year, alongside other strategic exits.
If successful, this would also mark a landmark in the government’s broader plans to privatise select public sector banks.
