IDBI Bank Disinvestment Likely to Miss Deadline, Sale May Shift to Next Financial Year

The long-awaited sale of IDBI Bank is now likely to be pushed to the next financial year, as key procedures and evaluations are still in progress. Officials said the delay could affect the government’s disinvestment receipts for the current year, but the overall fiscal impact will be managed.

Sources said that the strategic disinvestment of IDBI Bank is taking more time than expected due to ongoing evaluations and regulatory processes. As a result, the government’s non-debt capital receipts for this financial year may fall short of the Budget estimates.

In recent years, the government has stopped setting separate disinvestment targets. Since the revised estimates of FY24, such receipts are now counted under “miscellaneous capital receipts.”

The proposed deal involves the sale of a 30.48% stake held by the government in IDBI Bank, which is currently valued at around ₹36,000 crore. Any delay in this transaction could impact the FY26 target of ₹47,000 crore set for disinvestment and asset monetisation combined.

So far, disinvestment proceeds in the current financial year stand at just ₹8,768 crore, while asset monetisation figures are not clearly available. However, officials said the shortfall can be offset through higher-than-expected dividends from the Reserve Bank of India (RBI) and possible savings across different government expenditure heads.

Earlier, in July 2025, officials had indicated that the IDBI Bank sale could be completed by October 2025. But the process slowed down due to changes in bidder interest and market developments.

One major development was Emirates NBD’s announcement in October to acquire up to 60% stake in RBL Bank for about $3 billion (around ₹27,000 crore). This proposed deal, subject to regulatory approvals, would be the largest foreign investment in India’s private banking sector. After this move, market experts believe Emirates NBD is no longer keen on bidding for IDBI Bank.

Other bidders still in the race include Fairfax India Holdings, which promotes CSB Bank, and Kotak Mahindra Bank. Sources said discussions and evaluations are continuing, making it difficult to give a clear timeline for the completion of the sale.

Past experiences show that even after bids are finalised, money may not come in quickly. In the Air India disinvestment, nearly four months passed between Cabinet approval and the final closure of the deal. Since IDBI Bank is a regulated lender, the process could take even longer due to the need for multiple regulatory approvals and time for bidders to arrange funds.

Apart from the government, Life Insurance Corporation of India (LIC) is also planning to sell its 30.24% stake in IDBI Bank. In total, the Department of Investment and Public Asset Management (DIPAM) had received expressions of interest for a combined 60.72% stake in the bank back in January 2023, which is now valued at around ₹72,000 crore at current market prices.