Government revives IDBI Bank privatisation; mega Rs 55,000 crore deal back on track

The government is targeting proceeds of around Rs. 50,000-55,000 crore from the transaction, which is expected to be one of the country's biggest banking privatisation deals.

The Centre, which holds a 45.48 percent stake in IDBI Bank, along with state-owned Life Insurance Corporation of India (LIC), which owns 49.24 percent, plans to jointly sell a 60.72 percent stake in the lender while transferring management control to the successful bidder.

The strategic sale process was first announced in October 2022, with several domestic and international investors expressing interest. However, the transaction has faced delays due to regulatory issues, valuation concerns, and changes in market conditions.

According to the report, the government has now asked the shortlisted bidders to submit revised financial offers as it looks to expedite the sale.

One of the key challenges remains the Reserve Bank of India's (RBI) existing guidelines, which restrict foreign ownership in newly licensed private banks. Any successful bidder will have to comply with these regulatory norms before taking over the bank.

The proposed privatisation forms part of the government's broader disinvestment strategy aimed at reducing its presence in non-strategic sectors and unlocking value from public sector assets.