Government to Exit IDBI Bank in FY26 as Final Bids Set to Be Placed This Week

The government is preparing to complete its divestment from IDBI Bank in the current financial year, with final bids expected to be submitted this week by Kotak Mahindra Bank, Emirates NBD, and Fairfax India Holdings, as per Moneycontrol report. 

Final Bids Submission Process Underway 

3 shortlisted bidders are set to submit their final bids to acquire 61% stake in IDBI Bank. As per report one bid has already been submitted, with the remaining expected before the weekend.  

The bids will be placed to the Department of Investment and Public Asset Management (DIPAM) in the finance ministry. The government and Life Insurance Corporation of India (LIC) jointly hold 90% stake in the bank. 

Transaction Timeline and Expectations 

The government expects to fetch approximately ₹33,000 crore from the sale, with its 30.48% stake being divested while LIC offloads 30.24% stake.  

Once financial bids are submitted, they will be opened in the presence of transaction advisers, members of the inter-ministerial group (IMG), and authorised representatives of the bidders. 

Read More: IDBI Bank Disinvestment Enters Advanced Phase as Government Signals More Deals Ahead! 

Historical Context of the Divestment 

The proposal for IDBI Bank's disinvestment was first mooted in February 2020, with a request for proposal (RFP) sent in October 2022.  

The Reserve Bank of India has cleared 4 interested bidders from a 'fit and proper' standpoint: Kotak Mahindra Bank, Fairfax India Holdings, Emirates NBD, and Oaktree Capital. 

Regulatory Approval Process 

DIPAM Secretary Arunish Chawla confirmed in a post-Budget interaction on February 1, 2026, that the strategic divestment had moved to the third phase, meaning technical and financial bids had been invited. The process will require recommendation from the IMG followed by approval from the finance minister. 

Conclusion 

The government aims to complete the IDBI Bank divestment in FY26, with final bids being placed this week by Kotak Mahindra Bank, Emirates NBD, and Fairfax India Holdings. The transaction is expected to generate ₹33,000 crore for the government and LIC through the sale of their combined 61% stake in the bank. 

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