Govt to call financial bids for IDBI stake sale by Oct-Dec: Divestment secy

Mint

14 hours ago

New Delhi: The government is preparing to invite financial bids in the third quarter (October-December) of FY26 for a strategic stake sale of IDBI Bank, as potential buyers have completed due diligence, Department of Investment and Public Asset Management (DIPAM) secretary Arunish Chawla said on Friday.
'All data room protocols have been finalized for interested bidders,' Chawla told reporters, indicating that the divestment process is now ready to move into its final stages.
'We hope to invite the financial bids by Q3, FY26,' he said, adding that the government is aiming to finalize the winning bidder before the close of the current financial year (FY26).
Mint had reported on 23 July, citing sources, that the government will likely focus solely on completing the strategic sale of IDBI Bank by December, and push its disinvestment plans for other public sector undertakings to the last quarter of FY26.
The IDBI Bank sale is being jointly executed by the central government and state-run Life Insurance Corporation of India (LIC), which together own more than 94% of the bank.
The Centre holds a 45.48% stake, while LIC owns 49.24%. The proposed transaction involves offloading a 60.72% stake in total.
The IDBI Bank stake sale is expected to fetch about ₹ 50,000 crore for the government and LIC.
Mint had earlier reported that potential suitors for the IDBI Bank stake include Fairfax India Holdings (promoter of CSB Bank), Emirates NBD, and Kotak Mahindra Bank.
Meanwhile, Chawla also said that the Request for Proposal (RFP) process forLife Insurance Corporation of India(LIC) stake sale has been completed.
"Merchant bankers for LIC and public sector financial institutions (including public sector banks) have been appointed for three years, extendable to five years," Chawla said.
On 11 March, Mint reported that the central government may divest 2-3% of its stake in LIC in 2025-26, depending on market conditions, as part of its efforts to meet the mandated 10% public shareholding requirement by 2027.
The government currently holds a 96.5% stake in LIC, following the sale of a 3.5% stake through the company's initial public offering (IPO) in May 2022, which raised around ₹ 21,000 crore.
The LIC stock settled about 1.2% lower at ₹ 884.60on the BSE on Friday.
To be sure, the Securities and Exchange Board of India (Sebi) had initially set a May 2024 deadline for LIC to comply with the 10% minimum public shareholding rule.
However, this deadline was extended till 16 May 2027, providing the insurer additional time to meet the requirement.
LIC's market capitalization at the time of listing in May 2022 stood at about ₹ 5.5 trillion, making it India's fifth most-valuable company.
However, the company's value has eroded considerably since then.
Chawla also said that the ministry of finance is doing a weekly capital review of public sector enterprises (PSEs) to ensure that they meet their targets and continue to energize the economy amid the ongoing geopolitical challenges.
"PSEs will continue with performance milestones and the capex programme to sustain the economic growth momentum," he added.