News

Following the recent correction, shares of IDBI Bank are trading at around 1.5x price-to-book value. The stock has declined about 30% in the past month but remains roughly 6% higher over the last one year.The Central government's plan to privatise IDBI Bank is unlikely to move forward in the current financial year. The divestment process may be shelved as the financial bids submitted by potential buyers are believed to be below the reserve price set by the government. Two key bidders had emerged during the process, sources told CNBC-TV18. These included Canadian investor Prem Watsa's Fairfax Financial Holdings and Emirates NBD, the Dubai-based banking group.However, both potential bidders already have major exposure in the Indian banking sector. Emirates NBD is currently in the process of acquiring a controlling stake in RBL Bank after receiving approval from the Competition Commission of India to purchase up to a 60% stake for about ₹27,000 crore. Meanwhile, Fairfax Financial Holdings is already the promoter of CSB Bank, where it holds roughly a 40% stake after acquiring control in 2018.The government had originally targeted completion of the IDBI Bank privatisation in FY26. The strategic disinvestment involves selling a combined 60.7% stake held by the Government of India and Life Insurance Corporation of India, which could potentially bring in over ₹30,000 crore for the government.The privatisation process was first formally announced in the Union Budget of February 2021. In May 2021, the Union Cabinet approved the strategic disinvestment of IDBI Bank along with the transfer of management control. The process gathered momentum in October 2022 when the government issued a Request for Proposal.Expressions of Interest were invited in January 2023, with investors including Fairfax Financial Holdings, Emirates NBD and Oaktree Capital Management clearing the RBI's fit-and-proper criteria. Kotak Mahindra Bank had also joined the race. Due diligence by potential bidders began in August 2025, and the Department of Investment and Public Asset Management had earlier said that a core part of the transaction would be completed by March 31, 2026.Financial bids were eventually received in February 2026 and the evaluation process began. However, the deal now appears set to be scrapped as the bids are said to be below the reserve price amid global market uncertainties.Industry executives and bankers believe multiple factors weighed on the bidding process. The reserve price was seen as relatively high compared to IDBI Bank's price-to-book valuation, while the potential buyer pool also shrank after Kotak Mahindra Bank did not participate in the final bidding.Another challenge cited by investors was the bank's low free float. With the government and Life Insurance Corporation of India together holding nearly 94.7% of the bank, the market price was not considered a reliable benchmark for valuation.Potential buyers also factored in operational complexities associated with running a former public sector bank, including legacy systems, unionised workforce structures and government-era operating practices. At the same time, prevailing global uncertainties likely affected investor appetite. One of the key bidders, Emirates NBD, is also in the middle of executing its acquisition of RBL Bank.Following the recent correction, shares of IDBI Bank are trading at around 1.5x price-to-book value. The stock has declined about 30% in the past month but remains roughly 6% higher over the last one year.NewsLive TVMarketPopular CategoriesCalculatorsTrending NowLet's Connect with CNBCTV 18Network 18 Group :©TV18 Broadcast Limited. All rights reserved.