The Indian government is not in a hurry to revive the IDBI Bank disinvestment process, government sources told ET Now on Thursday, May 21 — a statement that effectively signals the long-delayed privatisation of India’s fifth-largest public sector bank remains in a holding pattern with no firm timeline in sight.
What government sources said
The disclosure from official-level sources covers every angle of the process without committing to any of them. Discussions are underway and the process remains on track — but all options remain open at this stage. The decision on whether to invite fresh bids or reduce the reserve price will depend on approval from the competent authority, meaning the Cabinet or its designated committee. Talks are also ongoing with existing bidders. Current market conditions are playing a key role in the process. A decision will be taken at the appropriate time.
The formulation is classic bureaucratic optionality — nothing is cancelled, nothing is advanced, and every meaningful decision is deferred to a higher authority and a future date.
Where the IDBI disinvestment stands
The IDBI Bank privatisation has been one of the most anticipated and repeatedly delayed disinvestment processes in Indian financial history. The government and LIC together hold approximately 94.72% of IDBI Bank — the government at around 45.48% and LIC at around 49.24%. The strategic sale plan envisages the government and LIC together divesting approximately 60.72% to a strategic investor, which would transfer management control.
The Expression of Interest stage saw bidders emerge, but the process has stalled over the reserve price — the minimum valuation the government will accept. Market conditions and the bidders’ own valuation assessments have not converged, leaving the process in the limbo that Thursday’s sources confirmed.
What “fresh bids or reserve price reduction” means
The two options flagged — inviting fresh bids or reducing the reserve price — represent different diagnoses of why the process is stuck. Inviting fresh bids suggests the government believes more competition will produce better outcomes and that the current bidder pool is too narrow. Reducing the reserve price suggests the government acknowledges its valuation expectations may be above what the market is willing to pay, and is willing to adjust the floor to get a transaction done.
Both options require “approval from the competent authority” — which in practice means a Cabinet decision, implying political-level engagement with a process that has so far been handled primarily at the bureaucratic and regulatory level.
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