The strategic disinvestment of IDBI Bank is likely to spill over to the next financial year as the necessary procedural and evaluation processes are still under way, sources said. This would mean that the government’s non-debt capital receipts in the current fiscal year may fall significantly short of the Budget target.
Since the revised estimates for FY24, no separate target for disinvestment proceeds was kept. Receipts from sale of government stakes in companies are now under the head – “miscellaneous capital receipts.”
Valuation of the government stake
The proposed IDBI Bank disinvestment involves sale of 30.48% government stake in the bank, which is currently valued at around Rs 36,000 crore. A slippage in the transaction timeline could result in a shortfall against the FY26 combined target of Rs 47,000 crore for disinvestment and asset monetisation.
So far in the current financial year, disinvestment proceeds have stood at just Rs 8,768 crore, while asset monetisation receipts could not be independently ascertained.
Despite the likely delay, officials indicated that the impact on fiscal arithmetic would be absorbed through higher-than-expected dividends from the Reserve Bank of India and potential savings across several expenditure heads.
Market performance
Shares of IDBI Bank closed at Rs 110.85 on Monday, down 3.48% from the previous close on the BSE.
Officials had earlier suggested in July 2025 that the transaction could be concluded by October 2025. However, the process has since been dragging on due to multiple factors, including changes in bidder dynamics.
One key development that complicated the process was Emirates NBD’s announcement in October that it would acquire up to a 60% stake in private lender RBL Bank for about $3 billion (around Rs 27,000 crore). The deal, which includes a preferential share issue and a mandatory open offer, is subject to regulatory approvals and would mark the largest foreign investment in India’s private banking sector. Following this move, analysts no longer view Emirates NBD as a keen bidder for IDBI Bank.
Other shortlisted bidders include Fairfax India Holdings, the promoter of CSB Bank, and Kotak Mahindra Bank. Sources said procedures related to the stake sale and evaluations are ongoing, making it difficult to provide a firm timeline for completion.
Past strategic disinvestment precedents suggest that even if financial bids are received soon, proceeds may not flow in by March 31. In the Air India case, nearly four months elapsed between Cabinet approval of the winning bid in October 2021 and deal closure in January 2022. Given that IDBI Bank is a regulated lender, the process could take longer due to the need for prior regulatory clearances and time for bidders to arrange funds. Life Insurance Corporation of India (LIC) is also selling a 30.24% stake in the bank.
The Department of Investment and Public Asset Management (Dipam) had received multiple expressions of interest on January 7, 2023, for a combined 60.72% stake in IDBI Bank, valued at about Rs 72,000 crore at current market prices.