The Finance Ministry’s approval on Wednesday cleared the government’s 30% holding in IDBI Bank, setting the share price at ₹75.99. LIC will vacate the board, giving the new consortium a clean slate.
Arunish Chawla, the Finance Secretary, said the sale would protect employees and directors nominated by the Centre. "We have spent the last year coordinating with management, employee associations and qualified parties," he told the Times of India, adding that all service conditions and pensions would remain intact.
The move follows a decade‑long drive of strategic disinvestments, with the Cabinet approving roughly 36 sales since 2016. Chawla dismissed rumours that privatisation was stalled, noting that five sales were completed in five years and that the government remains "firmly on the track of reforms."
Valuation hinged on a dual approach: market multiples of comparable banks and an asset‑liability conversion of IDBI’s books. The average of the two methods produced ₹75.99 per share, while the winning bid of ₹81 a share secured clearance from the Competition Commission. Chawla said the methodology was chosen to counter market volatility and narrow trading.
The consortium is slated to take over before the fiscal year ends, a timeline that could see new management re‑engineer operations, infuse private‑sector efficiencies and boost the bank’s performance. Employees, meanwhile, will see their employment conditions preserved and a special pension fund earmarked for future retirees.