Finance Minister Nirmala Sitharaman said the disinvestment of IDBI Bank will continue, offering the clearest official signal yet that the government remains committed to the long-delayed stake sale.
She also said there is nothing on the table at present on consolidation among public sector banks, adding that a high-level banking committee will examine the matter. Sitharaman spoke to reporters on the sidelines of the inauguration of the new premises of State Bank of India's Local Head Office, Maharashtra Circle, named "Spandan."
The comments came after uncertainty over the future of the IDBI Bank privatisation process, following reports of valuation gaps and internal discussions on possible alternatives. The proposed transaction, which was called off last month, could be one of the largest banking sector stake sales planned by the government.
Sale Process
Earlier this month, NDTV Profit reported that the government was considering whether to restart the bidding process after the offers received were understood to be below its expected valuation. Sources had said bids were in the range of Rs 40,000 crore to Rs 45,000 crore, below the government's reserve price.
A separate report later said the government was not inclined to scrap the existing bids and was instead exploring ways to proceed while reassessing valuation metrics. Officials were also discussing whether to consider the bank's "unaffected" market price to reduce the impact of short-term volatility.
Among the options under discussion was a possible purchase by Life Insurance Corporation of India of the government's proposed 30.48% stake in IDBI Bank. LIC already owns 49.24% of the lender, while the government holds 45.48%.
Deal Size
Under the original plan, the government was to sell a 30.48% stake in IDBI Bank, while LIC was to divest 30.24%, taking the total stake on offer to 60.72%. Based on earlier market prices, the combined value was estimated at about Rs 72,000 crore.
The privatisation process has been under way since Jan. 7, 2023, when the Department of Investment and Public Asset Management received multiple expressions of interest from bidders.
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