The government plans to invite financial bids for the strategic sale of IDBI Bank by the end of March, aiming to conclude the transaction in the first half of the financial year 2025-26, according to official sources.

Fairfax Financial, Emirates NBD, Oaktree Capital and Kotak Mahindra Bank, which expressed interest in January 2024, are conducting a due diligence and assessing the bank’s valuation before submitting their bids. The Reserve Bank of India has completed its “fit and proper” assessment of the potential buyers.

“The disinvestment of IDBI Bank remains on track, with financial bids set to be called by March-end. We expect the sale to be completed by mid-FY2026,” a government official said.

The Centre, along with Life Insurance Corporation of India (LIC), will offload a 61 per cent stake in the lender, including 30.48 per cent held by the government and 30.24 per cent by LIC. The deal would mark India’s largest privatisation since the sale of Air India to Tata Group in 2021.

The privatisation process began in January 2023 when the government issued an expression of interest. Officials remain tight-lipped on expected proceeds, but market estimates suggest the stake sale could generate around ₹28,000 crore.

For FY25, the Union budget has set a ₹47,000-crore target for disinvestment and asset monetisation, without specifying a separate goal for IDBI Bank’s sale. The government has moved away from annual divestment targets, instead clubbing asset monetisation and privatisation under a ₹50,000-crore capital receipts framework.

The divestment process involves bidders reviewing a cloud-based data room containing sensitive financial details.