By BullScreen Editorial Team 
The government is likely to restart the privatisation process of IDBI Bank from scratch after financial bids received last week fell below the reserve price, prompting authorities to call off the exercise, according to officials familiar with the matter.
A ministerial panel overseeing the disinvestment is expected to review the situation soon and take a final call. Early discussions suggest a fresh process is the preferred route, with a detailed reassessment of valuation methods, particularly the reserve price mechanism.
Officials indicated concerns over the heavy reliance on stock market prices to determine the reserve price. With limited public shareholding, IDBI Bank’s stock is seen as more vulnerable to volatility and potential manipulation. The government currently holds a 45.48% stake, while Life Insurance Corporation of India owns 49.24%, leaving a small public float.
The bank’s shares have declined about 19% since the bidding process was scrapped, closing at ₹74.28 on the National Stock Exchange, near its 52-week low. This follows a sharp rally earlier this year when the stock touched ₹118.38 ahead of the bidding phase.
Bidders such as Fairfax Financial Holdings and Emirates NBD had reportedly submitted financial offers. Existing bidders may not need to seek fresh regulatory approvals if they participate again, which could help speed up the process.
Any successful bidder will still need to meet the “fit and proper” criteria set by the Reserve Bank of India and secure approvals from regulators including the Competition Commission of India, along with making an open offer to minority shareholders.
The reset signals the government’s continued push to privatise IDBI Bank, but also highlights the challenges in executing large-scale disinvestment amid market sensitivities.