India’s long-awaited privatisation of IDBI Bank may be put on hold after bids submitted by prospective buyers failed to meet the government’s expectations. According to news reports from NDTV Profit, the Centre has decided to call off the disinvestment process after the financial offers received from bidders came in below the reserve price.
Government sources indicated that the bids from Fairfax Financial Holdings and Emirates-based investors did not match the valuation expectations set by the government, prompting authorities to reconsider the strategic sale.
The development marks a potential setback for one of the largest proposed banking privatisation deals in India.
Sources told NDTV Profit that the disinvestment process has been halted primarily because the financial bids submitted by Fairfax and Emirates investors were lower than the reserve price set for the transaction.
Under the proposed plan, the Government of India intended to divest a 30.48% stake in IDBI Bank, which at current market prices was valued at approximately ₹36,000 crore.
In addition, Life Insurance Corporation of India (LIC) was expected to sell a 30.24% stake, bringing the total stake on offer to 60.72%. The combined transaction value was estimated at nearly ₹72,000 crore, making it one of the largest privatisation efforts in India’s banking sector.
However, the valuation gap between bidders and the government appears to have stalled the deal.
The potential halt in the IDBI Bank sale comes at a time when the government’s disinvestment receipts remain below broader fiscal targets.
As of March 9, data shows:
For FY2026, the government has set a ₹47,000 crore target for miscellaneous capital receipts, a category that now includes proceeds from stake sales.
Meanwhile, dividend income from Central Public Sector Enterprises (CPSEs) is expected to reach ₹71,000 crore in FY26 revised estimates, reflecting the government’s growing reliance on dividends rather than large-scale privatisation.
The possible suspension of the IDBI Bank disinvestment underscores the government’s cautious approach to privatisation amid valuation concerns and global uncertainties. While the strategic sale was expected to mark a landmark shift in India’s banking sector, authorities appear unwilling to proceed unless bids adequately reflect the asset’s value.
For now, the future of the IDBI Bank privatisation remains uncertain, with the government likely to reassess the transaction before deciding the next course of action.
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Published on: Mar 16, 2026, 11:33 AM IST
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