IDBI Bank Share Price Declines After Disinvestment Cancellation

IDBI Bank Shares in Focus as Government Cancels Strategic Disinvestment​

Strategic Stake Sale in IDBI Bank Called Off​

Shares of IDBI Bank are likely to remain in focus on Monday, March 16, after the government cancelled the proposed strategic disinvestment of the lender. The decision follows financial bids that were reportedly below the reserve price set for the transaction, according to sources.

Under the disinvestment framework, the government typically cannot accept bids that fall below the reserve price, which effectively stalled the privatisation process.

Valuation Concerns Impact Bidding Process​

Sources indicated that the reserve price for the stake sale was viewed as too high, and was not aligned with the bank’s price-to-book valuation. This mismatch is understood to have discouraged bidders from submitting higher offers.

Another factor affecting the valuation benchmark was the relatively low free float of IDBI Bank’s shares, which influenced market price movements and complicated the pricing assessment for the disinvestment.

Bidders and Financial Offer Details​

Among the shortlisted bidders, Fairfax Financial Holdings and Emirates NBD are understood to have submitted financial bids on February 6.

Meanwhile, Kotak Mahindra Bank, which was also shortlisted earlier in the process, had already indicated that it would not participate in the financial bidding stage.

Government and LIC Stakeholding in IDBI Bank​

The Government of India currently holds a 45.48 percent stake in IDBI Bank, while Life Insurance Corporation of India (LIC) owns another 49.24 percent.

Under the proposed disinvestment plan, the government and LIC together intended to sell a combined 60.7 percent stake in the lender. This included:

• 30.48 percent stake held by the Centre
• 30.24 percent stake held by LIC

Following the transaction, the government was expected to retain a 15 percent stake, while LIC would have held 19 percent.

Size of the Proposed Transaction​

As part of the plan, the government aimed to divest its 30.48 percent stake, which was valued at roughly ₹30,000 crore based on current market prices.

The IDBI Bank disinvestment process began on January 7, 2023, when the Department of Investment and Public Asset Management (DIPAM) received multiple expressions of interest from potential bidders.

With both the government and LIC planning to exit their controlling stakes, the transaction had been expected to become one of the largest privatisation deals in India’s banking sector.

IDBI Bank Share Price Performance​

Shares of IDBI Bank closed 6.69 percent lower at ₹92.20 on Friday. The stock has declined about 11 percent so far in 2026.