Centre Rethinks IDBI Bank Stake Sale; Plans OFS Route to Boost Valuation!

The Central Government is reconsidering its strategy for the stake sale in IDBI Bank after the disinvestment process hit a pause. Sources indicate that the government is now planning to increase public shareholding through the Offer for Sale (OFS) route to improve the bank’s valuation. Currently, public shareholding in IDBI Bank stands at just 5.29 percent, which is seen as a key factor limiting fair market pricing. By raising the free float to around 10–15 percent in phases, the government aims to unlock better value before proceeding with strategic stake sales.

At present, Life Insurance Corporation of India holds 49.24 percent stake in IDBI Bank, while the government owns 45.48 percent. Earlier, both entities had invited bids to sell a combined 60.72 percent stake. However, bids from entities like Emirates NBD Bank and Fairfax India reportedly fell below the reserve price, prompting a temporary halt to the process. The government is now preparing a phased disinvestment plan, with OFS as the first step, followed by strategic stake sale at a more favorable valuation.