Bid prices for IDBI Bank surged ₹3,917 crore after the Finance Ministry chose to keep the reserve price unchanged. The move follows the failure of the initial bidding round to hit the threshold set by the Department of Investment and Public Asset Management. The Core Group of Secretaries on Disinvestment (CGD) is steering the best‑offer round, a process that the ministry says remains double‑blind. The government says this flexibility is key to closing strategic disinvestments in a timely fashion.
In April 2026 the CGD reviewed the bank’s valuation, and two independent advisers walked through the comparable‑companies method using listed public‑sector banks as benchmarks. The valuation was updated after IDBI’s FY25 accounts were released in late April, and the revised figures were issued in May. The method was chosen because suitable comparable transactions were scarce, and the advisers relied on the most recent financials to gauge the bank’s true worth. The process kept bidders and valuers blind to each other's data, a safeguard cited by the ministry to maintain fairness.
An additional ₹627 crore tax liability was factored into the valuation, a figure the ministry labeled a low‑probability event. The bank’s disputed tax demand was indemnified by all qualified bidders, effectively neutralising the Centre’s revenue risk. The ministry clarified that any reimbursement would be limited to actual tax demands paid; if none are incurred, the transaction remains revenue‑neutral for the government.
LIC, which holds a majority stake, and the Centre will keep residual shareholdings, positioning them to ride any upside from IDBI’s restructuring. The bank’s shares are treated as private by the RBI for regulatory purposes, yet investors still view it as a public‑sector entity because of the sizeable government stake. The sale is expected to unlock value for both the Centre and LIC while setting the stage for future growth.
The next step is the finalisation of the best offer, after which the government will decide the payment schedule. The ministry expects the transaction to conclude before the end of Q3 2026, barring any unforeseen regulatory hurdles.