IDBI Bank Privatisation Restart Latest News: As the government's effort to privatise IDBI Bank failed, reports said that the Centre could take the OFS route to offload its stake.
IDBI Bank privatisation was formally announced in the Union Budget of 2021-22. But recently, the bid failed due to valuation concerns.
IDBI Bank OFS
Reports suggest that the government may consider selling a stake in IDBI Bank via the Offer-for-Sale (OFS) route.
IDBI Bank OFS will allow the government to raise funds by cutting down its stake and increasing public shareholding.
IDBI Bank Shareholding Pattern
IDBI Bank is controlled by state-run Life Insurance Corporation of India (LIC). As per IDBI Bank's shareholding pattern, the public float in IDBI Bank is only 5.29 per cent.
The remaining stake in IDBI Bank is held by LIC, which owns 49.24 per cent and the government, which holds 45.48 per cent.
Initially, the government and LIC had plans to sell a 60.72 per cent majority stake in IDBI Bank. As planned, the government was offloading 30.48 per cent while LIC was selling 30.24 per cent stake in IDBI Bank.
But the privatisation attempt failed after the financial bids from two buyers fell short of the government's reserve price.
IDBI Bank Privatisation History
This is the second time that the government has wanted to privatise IDBI Bank since the first announcement made in 2016.
The idea was first officially flagged in the Union Budget speech by then-Finance Minister Arun Jaitley (now late) in February 2016.
The first attempt to privatise the then state-owned IDBI Bank failed due to valuation concerns. However, the government later sold the controlling stake to LIC, which had been eyeing acquiring a stake in a bank to expand its bancassurance business model.
Subsequently, in January 2019, LIC acquired a 51 per cent controlling stake in IDBI Bank for approximately Rs 21,624 crore to rescue the lender from heavy bad loans as part of the disinvestment process.
As a result, the bank was categorised as a private-sector bank by the Reserve Bank of India.
In December 2020, the lender was reclassified as an associate company following the reduction of LIC's stake in the bank to 49.24 per cent.
The process for privatisation gained formal momentum when the Cabinet Committee on Economic Affairs gave its in-principle approval in May 2021 for strategic disinvestment along with transfer of management control in IDBI Bank.
In October 2022, KPMG India was appointed as Transaction Advisor and the intent to sell 60.72 per cent stake in the bank was announced.
The Department of Investment and Public Asset Management (DIPAM) invited Expressions of Interest (EoI) in October 2022, and market regulator Sebi approved the reclassification of GOI as a public shareholder upon completion of the sale in January 2023.
Later in August 2025, the regulator gave its nod for reclassification of LIC as a public shareholder upon completion of the sale and after a long due diligence period, financial bids from two Emirates NBD Bank and Prem Vatsa-promoted Fairfax India were finally received in February 2026.
