The government has invited fresh financial bids from existing shortlisted bidders for the strategic sale of IDBI Bank, in an attempt to revive the long-delayed privatisation process, according to a report by NDTV Profit.
The move follows an earlier report by Moneycontrol, which said the stalled disinvestment appeared to be gaining momentum, with fresh talks underway between Fairfax India Holdings, led by Canadian billionaire Prem Watsa, and the Department of Investment and Public Asset Management (DIPAM). According to that report, Fairfax had submitted a revised bid and proposed to make IDBI Bank its anchor investment in India's financial services sector.
The government is aiming to conclude the stake sale within the current financial year (FY27) and expects to raise around ₹50,000 crore to ₹55,000 crore from the transaction, NDTV Profit reported.
1 June 2026
Get the latest issue of Outlook Business
Why Fresh Bids Were Sought
The new round of bidding follows an earlier setback, after initial bids reportedly came in below the government's reserve valuation. Rather than reopening the process to new participants, the government has asked existing shortlisted bidders to submit revised financial offers, the report added.
The proposed transaction involves the sale of the combined stake held by the government and Life Insurance Corporation of India (LIC) in IDBI Bank, along with a transfer of management control. Earlier reports also said that, given concerns over IDBI Bank's limited free public float of 5.29%, the Centre may seek guidance from the Securities and Exchange Board of India (Sebi) on valuation-related issues.
Timeline of the Stalled Sale
The privatisation process traces back nearly a decade. In the mid-2010s, IDBI Bank was weighed down by rising bad loans and weak financials, which limited investor interest. LIC stepped in as a strategic investor in 2018-19, acquiring a majority stake and management control, a move that stabilised the bank and set the stage for its eventual privatisation.
In 2022, the government and LIC announced plans to jointly sell a 60.7% stake in the bank, with the government divesting 30.5% of its 45.5% holding and LIC selling 30.2% of its 49.2% stake. By early 2023, multiple investors had submitted expressions of interest. Over the following two years, the process moved through regulatory approvals and due diligence covering financial, operational and regulatory assessments.
Financial bids were finally submitted in February this year. According to an earlier Reuters report, Fairfax Financial Holdings, Emirates NBD and Kotak Mahindra Bank were among the bidders. Kotak Mahindra Bank later clarified that it had not submitted a financial bid.
The government had hoped to complete the transaction before March 31, 2026, but the deadline was missed. Multiple media reports said the bids fell short of the government's reserve price, the minimum acceptable price below which it would not sell. Market conditions and investor risk perception, including concerns linked to the West Asia conflict, reportedly contributed to this shortfall, prompting the government to pause and reassess.
Had the earlier deal gone through, it could have fetched ₹66,000 crore, according to previous estimates. The successful bidder would also have had the option to rename the bank.
The collapse of that round was seen as a setback for the government's broader plan to cut state ownership in banking and attract private capital into public sector banks.
What is at Stake
The government is seeking to divest its 30.48% stake in IDBI Bank, alongside LIC's 30.24% holding. Based on market prices reported at the time, the combined sale was estimated to fetch around ₹24,000 crore, separate from NDTV Profit's more recent ₹50,000-55,000 crore estimate for the revived transaction.
The eventual buyer will require final clearance from the RBI under its "fit and proper" criteria, along with approvals from the Competition Commission of India and other regulators. The successful bidder will also need to make an open offer to IDBI Bank's minority shareholders.
