IDBI Bank stake sale: Due diligence ongoing, financial bids likely by fiscal end: Sources – CNBC TV18

The disinvestment process of IDBI Bank is gaining momentum, with financial bids for the 60.72% stake likely to be invited by the end of the current fiscal, according to government sources.

The stake sale, which includes 30.48% held by the government and 30.24% by LIC, will also involve the transfer of management control.

“We are looking at it. We have moved to the due diligence by the bidders which are in the fray (for IDBI Bank stake sale). We hope to receive the financial bids within this fiscal year,” a government official told CNBC-TV18.

The government and LIC had jointly invited expressions of interest for the strategic sale of IDBI Bank, marking one of the most significant disinvestment initiatives in the banking sector. The transaction’s complexity necessitated prior RBI clearance.

The Reserve Bank of India completed its “fit and proper” assessment of bidders, following which the government opened a data room for due diligence in November. This step allows bidders to access the bank’s legal and financial documents and request additional information to aid their evaluation.

The draft share purchase agreement (SPA), which outlines regulatory and procedural requirements, is also under review by potential buyers.

Government sources added that approvals from the bank’s board, LIC, and the government will be necessary before finalising the deal.

“The finance ministry is keen on maintaining the momentum for the sale. We are committed to avoiding delays and ensuring that bidders are comfortable with the process,” Moneycontrol reported in October quoting sources.

In Q2FY25, the bank recorded a 38.3% year-on-year jump in net profit to ₹1,836.5 crore. Net interest income surged 26% to ₹3,876 crore, driven by improved lending margins.

Asset quality also showed progress, with the gross non-performing asset (GNPA) ratio declining to 3.68% in the September quarter from 3.87% in June. Net NPA reduced to 0.20% from 0.23% quarter-on-quarter.

With the due diligence process underway, financial bids are expected to provide clarity on the future ownership structure of IDBI Bank by March 2025.