Delhi, India – The Indian government is preparing to move forward with one of its key disinvestment plans. By December 2025, it plans to invite financial bids for the strategic stake sale in IDBI Bank, as confirmed by Arunish Chawla, Secretary of the Department of Investment and Public Asset Management (DIPAM).
This announcement signals progress in a stake sale that has been in the works for nearly three years. The process had earlier involved inviting Expressions of Interest (EoIs) in October 2022, where the government, along with LIC, proposed selling 60.72% of their combined holdings in the bank. This includes a 30.48% stake from the Government of India and 30.24% from LIC.
Due Diligence Completed, Next Step: Financial Bids
Chawla noted that the due diligence and data room access for all interested bidders have now been completed. He added, “We hope to invite financial bids in the third quarter of the financial year, and once we receive those, the winning bidder will be selected and sent to the Reserve Bank of India (RBI) for a final ‘fit and proper’ approval.”
Importantly, the Ministry of Home Affairs (MHA) has already granted security clearance to the prospective bidders, and the RBI has also completed its initial “fit and proper” evaluation.
IDBI Bank Shares Dip
On Friday, IDBI Bank’s stock closed at ₹90.17 on the BSE, down by 2.68% from the previous trading session. Despite the dip, investors are watching closely as the disinvestment plan gains momentum. The successful completion of this stake sale will be a significant move in India’s strategic disinvestment program.
What’s Next for LIC?
Apart from IDBI Bank, another high-profile disinvestment target is LIC (Life Insurance Corporation of India). The government currently holds a 96.5% stake in LIC. Back in May 2022, it had sold 3.5% through a landmark IPO, raising nearly ₹21,000 crore.
Now, to meet SEBI’s minimum public shareholding norm of 10%, the government needs to offload an additional 6.5% stake in LIC by May 16, 2027.
Chawla said that the government has completed the RFP (Request for Proposal) process for hiring merchant bankers and legal advisors to assist in LIC’s minority stake sale. These advisors will guide the government through the next stages of LIC’s share sale and similar divestments in other public sector financial institutions.
Public Shareholding Norms: What’s Required?
As per market regulator SEBI’s norms, public sector banks and financial institutions are required to have a minimum 25% public shareholding. Currently, five PSU banks are not in compliance. The government has set August 1, 2026, as the final deadline for these banks to reduce the government’s share and meet the requirement.
To help with this, DIPAM had issued two RFPs earlier this year, inviting bids from merchant bankers and legal firms. These firms will now be empanelled for three years, extendable by one more year, to handle multiple transactions as and when they are scheduled.
Chawla added, “Individual transactions can happen anytime over the next 3 years.
