IDBI Bank shares tank 15% after reports of stalled strategic stake sale

Shares of IDBI Bank Ltd tanked more than 15 per cent during the trading session on Monday amid the reports that the government has called off the strategic disinvestment of the lender after potential buyers submitted bids lower than the reserve price set for the transaction

Select media reports suggest that the privatisation process for the lender, which started in January 2023, has come to a standstill under the prevailing disinvestment rules that prevent acceptance of bids below the threshold. According to sources, the reserve price fixed for the bank was considered to be on the higher side and did not correspond with IDBI Bank's price-to-book valuation.

Another factor influencing the outcome was the low free float in IDBI Bank's shares, which impacted share price movement and complicated the valuation benchmarks for the disinvestment. However, Department of Investment and Public Asset Management (DIPAM) is yet to share any official detail on the stake sale.

Shares of IDBI Bank cracked 15.35 per cent to Rs 78.05 on Monday, with its market capitalization slipping below Rs 84,000 crore. The stock has cracked nearly 35 per cent from its 52-week high at Rs 118.45, hit on January 05, 2026. The stock has cracked 30 per cent in the last one month only.

Among the shortlisted entities, Fairfax Financial Holdings and Emirates NBD submitted financial bids by 6 February. However, Kotak Mahindra Bank, which was previously in the running, had indicated it would not participate in the financial bidding process.

Currently, the Centre holds a 45.48 per cent stake in IDBI Bank, while Life Insurance Corporation of India (LIC) owns 49.24 per cent. The original plan sought to divest a combined 60.7 per cent stake. The government intended to divest its 30.48 per cent stake in IDBI Bank, valued at nearly Rs 30,000 crore.

The disinvestment process began on January 7, 2023, when the DIPAM started accepting expressions of interest. With both the government and LIC considering an exit from controlling stakes, the IDBI Bank sale was positioned as one of the largest privatisations in the banking sector to date.