Privatisation

IDBI Bank Privatisation Update: Bank Privatisation Process is progressing steadily


IDBI Bank Privatisation Update: The disinvestment of IDBI Bank is progressing steadily, with financial bids for a 60.72% stake expected to be invited by the end of the current fiscal year, according to government sources. This stake comprises 30.48% held by the government and 30.24% by LIC, alongside the transfer of management control.

“We have entered the due diligence stage for bidders participating in the IDBI Bank stake sale and anticipate receiving financial bids within this fiscal year,” a government official told CNBC-TV18.

Key Developments in the Disinvestment Process:

  1. Expressions of Interest: The government and LIC jointly invited expressions of interest (EOIs) for the strategic sale, marking a major initiative in banking sector disinvestment.
  2. Regulatory Clearance: The Reserve Bank of India completed its “fit and proper” assessment of bidders, allowing the government to open a data room in November for due diligence. This enables bidders to review the bank’s legal and financial documents and request additional information.
  3. Draft Share Purchase Agreement (SPA): Potential buyers are reviewing the draft SPA, which outlines the regulatory and procedural framework for the transaction.
  4. Approvals Needed: The deal requires final approval from the bank’s board, LIC, and the government before being finalized.

Financial Performance:

In Q2FY25, IDBI Bank reported a 38.3% year-on-year increase in net profit, reaching ₹1,836.5 crore. Net interest income rose 26% to ₹3,876 crore, supported by improved lending margins.

Asset quality also improved:

  • Gross NPA (GNPA): Declined to 3.68% in September 2025, compared to 3.87% in June.
  • Net NPA: Reduced to 0.20% from 0.23% quarter-on-quarter.

Timeline:

With due diligence in progress, financial bids are expected to bring clarity to the bank’s future ownership structure by March 2025. The finance ministry remains focused on avoiding delays and ensuring a smooth bidding process to maintain momentum, as reported by Moneycontrol.

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