Centre Begins Revaluation Process Of IDBI Bank After Failed Divestment Attempt Earlier

In a renewed push towards completing the privatisation process of IDBI Bank, the government has initiated a fresh valuation exercise to revive the long-pending sale of the lender.

The valuation process is currently underway and is expected to take about a month to complete, according to a report by Moneycontrol citing a government official.

The Centre will take a call on whether to invite fresh bids for the stake sale after the revised valuation is finalised. The updated valuation will effectively serve as the benchmark for the next phase of the disinvestment process.

The move comes after the earlier attempt to sell the bank failed to generate the expected outcome. The government and Life Insurance Corporation of India, which together hold a majority stake in the lender, are now reassessing their strategy to ensure better value realisation from the transaction.

Officials indicated that the current market environment has also played a role in slowing the process.

The stock of IDBI Bank has witnessed a sharp correction from around Rs 118 during the peak of disinvestment optimism to the low Rs 70 range after the sale process lost momentum.

This decline has narrowed the government’s room for negotiation and raised concerns about proceeding with the sale at lower valuations.

In the earlier round of the strategic sale, potential bidders such as Fairfax India Holdings and Emirates NBD were reported to have submitted bids that fell short of the government’s internal valuation expectations.

This time, the government is expected to adopt a more measured and calibrated approach to the transaction, avoiding the kind of speculative market activity that had earlier pushed up the stock price sharply.

Officials said that the global environment is currently not very supportive for large-ticket privatisation deals, making it important to align valuation expectations with prevailing market conditions.

The Centre had first invited expressions of interest in 2022 to sell a 60.72 percent stake in IDBI Bank, including management control, making it one of the most significant banking sector privatisation efforts in recent years.