Shares of IDBI Bank fell sharply in early trade on Monday after reports indicated that the proposed strategic disinvestment of the lender may be scrapped as financial bids from potential buyers were below the reserve price.

The stock declined as much as 14% to ₹79.25 on the NSE during morning trading on March 16, reacting to uncertainty surrounding the government’s plan to sell its stake in the bank.

Also Read | Guwahati to get healthcare push: ₹700+ crore project to bring 300-bed hospital, premium hotel

According to a report by Press Trust of India (PTI), financial bids submitted by interested investors were lower than the reserve price fixed by the inter-ministerial group overseeing the disinvestment process.

Strategic stake sale under uncertainty

The Centre and Life Insurance Corporation of India (LIC) had proposed selling a 60.72% stake in IDBI Bank as part of the government’s broader disinvestment programme.

In October 2022, the government and LIC invited Expressions of Interest (EoI) for the stake sale. Under the proposal, the Centre planned to divest 30.48%, while LIC intended to sell 30.24% of its holding.

Currently, the government and LIC together hold 94.71% of the bank, with the government owning 45.48% and LIC holding 49.24%.

According to PTI, bids submitted by prospective buyers were opened recently and were found to be below the reserve price approved by the inter-ministerial group and the core group on disinvestment headed by the Cabinet Secretary.

Two bidders, Fairfax, led by investor Prem Watsa, and Emirates NBD, had reportedly submitted financial bids for acquiring the controlling stake. The bids followed security clearance from the Ministry of Home Affairs and a “fit and proper” assessment by the Reserve Bank of India, after which shortlisted bidders carried out due diligence of the bank.

Background: LIC’s earlier rescue of the bank

The current disinvestment effort traces back to January 2019, when LIC acquired a 51% controlling stake in IDBI Bank for about ₹21,624 crore to help stabilise the lender after years of mounting bad loans.

Following that transaction, the Reserve Bank of India classified IDBI Bank as a private-sector bank.In December 2020, the bank was reclassified as an associate company after LIC’s stake was reduced to 49.24%.

Q3 FY26 financial performance

For the third quarter of FY26, IDBI Bank reported a net profit of ₹1,935 crore, slightly higher than the ₹1,908 crore recorded in the same quarter of the previous financial year.

Also Read | Not Adani or Reliance: These fertiliser stocks are leading India’s green hydrogen push

However, the bank’s total income declined to ₹8,282 crore from ₹8,565 crore a year earlier, according to the lender’s regulatory filing. Interest income also fell to ₹7,074 crore, compared with ₹7,816 crore in the corresponding quarter last year.

On the asset quality front, the bank’s gross non-performing asset (NPA) ratio improved to 2.57% as of December 31, 2025, down from 3.57% a year earlier. Net NPA remained unchanged at 0.18%. Meanwhile, the capital adequacy ratio rose to 24.63%, compared with 21.98% a year ago. Return on Assets (RoA) declined slightly to 1.83% in Q3 FY26, from 1.99% in the year-ago quarter.

{News Ei Samay does not provide investment advice anywhere. Investment and trading in the share market or any field involve risk. Proper study and expert advice are recommended beforehand. This news is published for educational and awareness purposes.}