60.72% Stake Divestment to Mark Major Disinvestment Push in FY26
By Business Desk | July 10, 2025
The strategic sale of IDBI Bank is expected to be completed by October 2025, according to a senior government official. The transaction involves a 60.72% stake, jointly held by the Government of India and Life Insurance Corporation (LIC), and is being positioned as a significant milestone in the country’s disinvestment roadmap.
The process has gained momentum in recent weeks, with the draft Share Purchase Agreement (SPA) being finalized for signing with the shortlisted bidders, sources familiar with the development confirmed.
Stake Sale Breakdown
The proposed stake includes:
Shares of IDBI Bank closed marginally higher at ₹99.95 on the BSE on Wednesday, up 0.1% from the previous close.
Shortlisted Bidders in Final Stages
Among the bidders shortlisted for the final stage of the process are:
These bidders are expected to submit their financial bids soon. The government is also considering inserting provisions in the SPA that would allow the successful bidder autonomy in management decisions, including changes in the leadership team.
However, in compliance with the Banking Regulation Act, 1949, voting rights of any shareholder or group acting in concert will remain capped at 26%, regardless of the shareholding exceeding that threshold.
Strategic Significance
This disinvestment is expected to provide a major boost to the government’s non-debt capital receipts, which have a target of ₹47,000 crore in FY26 through asset monetisation and strategic disinvestment initiatives.
“This will be the largest BFSI sector deal in India to date, and second largest overall after the Walmart-Flipkart transaction,” said a government source.
To ensure a smooth transition, the government is addressing the legitimate concerns of employees and stakeholders through specific clauses in the SPA related to job security, benefits, and management transition.
Background
The Department of Investment and Public Asset Management (DIPAM) had received multiple Expressions of Interest (EOIs) for the IDBI Bank stake on January 7, 2023. Since then, the process has gone through extensive due diligence and regulatory vetting.
As part of India’s broader effort to restructure public sector undertakings and attract private capital, the IDBI Bank sale is a flagship initiative that could pave the way for similar transactions in the financial sector.
