A key panel of ministers overseeing the divestment process will be briefed soon on developments and will take a final call, but the overall view is to move ahead and restart the process, a person aware of early discussions said.
The government, which has been seeking to divest IDBI Bank for about five years now, is likely to examine the process in detail, including the calculation of the reserve price mechanism used in the case of IDBI Bank, they said.
Concerns had been expressed over the excessive reliance on the stock price to fix the reserve price in cases such as IDBI Bank that have a limited public float, making it vulnerable to market manipulation, they said.
The government owns 45.48% of IDBI Bank and state-run Life Insurance Corp of India (LIC) holds a 49.24% stake. About 5% is with the public.
IDBI Bank’s stock price has seen a decline of about 19% since the financial bids were scrapped. It closed at ₹74.28 on the National Stock Exchange on Tuesday, dropping close to its 52-week low of ₹72 on April 7, 2025.
RBI Standards
The reserve price was based on the stock price, which had surged in the approach to the start of the bidding process, hitting a 52-week high of ₹118.38 on January 5. Prem Watsa’s Fairfax Financial and Emirates NBD are understood to have submitted financial bids.
“Although the process will start afresh, if the existing candidates choose to submit fresh bids, they will need not again seek clearances from the agencies and the regulator,” said an official, adding that this will ensure that the process isn’t delayed.
“New submissions, however, will be evaluated as per guidelines,” he said, adding that there are no plans to merge any staterun bank with IDBI.
As per the process followed last time, the successful bidder will have to go through a final assessment by the RBI to ensure that it meets the regulator’s ‘fit & proper’ standards. In addition, approvals will be needed from statutory and regulatory authorities, including the Competition Commission of India. The successful bidder will also have to comply with the requirement to make an open offer to minority shareholders of IDBI Bank.
