The government on Monday reviewed its disinvestment strategy, including the IDBI Bank strategic sale, as stock market volatility in the aftermath of the West Asia war has cast a shadow over its sell-off bid, a person familiar with the matter said.
A core group of secretaries, headed by cabinet secretary TV Somanathan, deliberated on the way forward, the person said.
The group is expected to soon decide on the revised valuation and timelines for the IDBI Bank sale.
The transaction entered an uncertain phase in February as financial bids for the lender were lower than the floor price set by the government.
Officials are now careful not to repeat the mismatch between investor offers and the government valuation, and would endorse a valuation that is aligned with market realities.
Addressing an audience of corporate bosses and top officials at the ET Awards in Mumbai on Saturday, Finance Minister Nirmala Sitharaman asserted that the strategic sale of IDBI Bank would take place. “There is no halting. It will happen,” she said.
The government had budgeted a combined disinvestment and asset monetisation revenue of Rs 80,000 crore for 2026-27, compared with Rs 45,306 crore last fiscal, hoping to conclude the IDBI Bank transaction in the first half.
Currently, the Centre holds 45.48% and state-run Life Insurance Corp (LIC) 49.24% in IDBI Bank. Together, they aim to offload a 60.72% stake—30.48% by the government and 30.24% by LIC.
At Monday’s share price on the BSE, sale of a 30.48% stake in IDBI Bank could fetch the government about Rs 25,411 crore.
To be sure, the lender has lost about a third of its market value since February 28 when the US and Israel launched joint strikes on Iran, dampening market sentiments globally.
Apart from the cabinet secretary, the core group on disinvestment includes top officials from the departments of investment and public asset management, financial services, economic affairs, legal affairs and senior representatives of the relevant administrative ministry and NITI Aayog.
ET had earlier reported that the government was planning to accelerate its asset monetisation programme in 2026-27, aiming to boost its resources and make up for any potential shortfall in disinvestment proceeds.
The overall asset monetisation target for ministries and state-run entities under them is set at Rs 3.26 lakh crore for 2026-27.
Only a part of the asset monetisation revenue flows to the Consolidated Fund of India while a major chunk of it goes to relevant state-run entities.
Source: Economic Times