Government Accelerates IDBI Bank Disinvestment, Due Diligence to Start in November

Government Accelerates IDBI Bank Disinvestment, Due Diligence to Start in November

The Indian government is moving ahead with the disinvestment process for IDBI Bank, as per a report by ET NOW citing official sources. The due diligence phase for potential bidders is set to begin in November, and financial bids for the bank's strategic sale are expected to be submitted by the fourth quarter of FY25.

According to the report, interested bidders will gain access to IDBI Bank's data room within the next 15 days. These bidders have already secured security clearance from the Ministry of Home Affairs, and the finalization of the draft Share Purchase Agreement will commence soon. Additionally, regulators are providing a reasonable timeframe to ensure compliance with Reserve Bank of India (RBI) guidelines, which mandate that a promoter can only hold a single banking license.

The RBI has already granted ‘fit and proper’ approval to IDBI Bank, a crucial milestone in the ongoing sale process. The government had previously received multiple Expressions of Interest (EOI) for a 60.72% stake in the bank, which includes both the government's and Life Insurance Corporation's shares.

IDBI Bank’s strategic sale has been a key focus of the government's disinvestment strategy. After the EOI stage, the process is now advancing with prospective buyers undergoing thorough reviews of the bank's operations, assets, and liabilities before submitting final financial bids.

IDBI Bank has received significant attention from various domestic and international entities due to its large retail and corporate banking portfolios. Its disinvestment is expected to further privatize the Indian banking sector and align with the government's broader economic goals.