Government likely to scrap IDBI Bank's stake sale after bids came below expectations.
IDBI Bank shares crashed about 16% following the report.
The strategic sale of 60.7% stake was launched in 2022 as part of government's privatisation push.
The government's long-running attempt to sell its stake in IDBI Bank appears to have hit a dead end, with reports suggesting that the bids received from potential buyers fell below the minimum price set by the government. As a result, the entire sale process is likely to be scrapped, at least for now.
Following this, IDBI Bank shares nosedived nearly 16% in early trading on Monday, and were still deep in the red at ₹78.20 by 2:00 PM, down over 15% from the previous close of ₹92.20.
2 March 2026
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For context, IDBI Bank had a rough decade earlier, weighed down by a mountain of bad loans. In 2019, state-owned insurer Life Insurance Corporation of India (LIC) stepped in to bail it out by acquiring a controlling stake, essentially putting the bank on government-backed life support.
In 2022, the government and LIC decided it was time to move on. They announced plans to sell a combined 60.7% stake in the bank. The is government looking to offload 30.5% of its 45.5% holding, and LIC is looking to sell 30.2% of its 49.2% stake. The deal, if it had gone through, could have fetched a combined ₹66,000 crore, according to reported estimates.
The sale had attracted serious interest. According to a Reuters report from February, Canada's Fairfax Financial Holdings, Dubai's Emirates NBD, and Kotak Mahindra Bank were among those who had submitted bids. However, Kotak Mahindra Bank later clarified that it had not submitted a financial bid.
Authorities had hoped to wrap up the transaction before March 31, 2026. That deadline now looks unlikely to be met. The successful bidder, had the deal gone through, would also have had the option to rename the bank entirely.
The collapse of this sale is a setback for the government's broader plan to reduce state ownership in the banking sector and attract private capital into public sector banks.
