IDBI Bank Stake Sale to Be Completed in 2025: Who Are the Bidders in the Race

Department of Financial Services Secretary M. Nagaraju said on May 5 that the strategic sale of the government’s stake in IDBI Bank will be completed within the 2025 calendar year.

“The stake sale in IDBI Bank will get completed this calendar year,” Nagaraju told Moneycontrol.

He was speaking on the sidelines of the listing ceremony of the first Residential Mortgage-Backed Securities.

Earlier, on April 9, Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla said the process was progressing steadily, with key steps such as data room access and asset valuation already underway. Reports say shortlisted bidders—including Fairfax, Emirates NBD, Oaktree Capital, and Kotak Mahindra Bank—are set to gain access to the bank’s confidential data.

After passing regulatory checks over the past year, they are now reviewing key financial details, including top borrowers and bad loans, via a secure cloud-based data room before submitting their final bids.

The Centre, along with Life Insurance Corporation (LIC), currently holds a 95% stake in IDBI Bank. Together, they plan to divest 60.72% of their combined shareholding, including management control. This privatisation plan was first announced in the Union Budget for 2021–22.

The decision followed a challenging period for the bank, marked by high non-performing assets (NPAs) and capital adequacy concerns. To stabilise the lender, the government infused fresh capital and sold a portion of its stake to LIC. In 2019, the Reserve Bank of India (RBI) reclassified IDBI Bank as a private sector bank, though it remained under government control. Around the same time, the bank was placed under the RBI’s Prompt Corrective Action (PCA) framework due to its weak financial metrics.

In January 2023, the government invited Expressions of Interest (EoIs) from potential buyers. However, by January 2024, only four proposals had been received, reflecting subdued interest from global investors. According to The Economic Times, the next steps in the sale process include completing due diligence and issuing a draft share purchase agreement before financial bids are submitted.

Amid the prolonged disinvestment process, IDBI Bank has shown signs of recovery. Since exiting the PCA framework in 2021, the bank has reported improved financial performance, with steady growth in deposits and profitability.

For the financial year 2025–26, the government has set a disinvestment and asset monetisation target of Rs 47,000 crore. The IDBI Bank stake sale is expected to be one of the major contributors toward achieving this goal, alongside other planned divestments.