India has been trying to sell IDBI Bank for five years. Even with real bidders at the table, the deal keeps falling apart.
Now Delhi is thinking about cutting the asking price by as much as 20% to actually get it done.
The last round drew real interest from two big foreign names. Prem Watsa's Fairfax Financial and Dubai's Emirates NBD both sent in financial bids before the government called it off.
Every offer came in below the government's secret reserve price. That's the lowest amount it would accept.
The Department of Investment and Public Asset Management called off the sale in March 2026, just before its own March 31 deadline.
The reserve price was tied to where IDBI Bank's stock was trading. That sounds fine until you look at the stock.
IDBI Bank has a public float of about 5%. That means very few shares actually trade hands, and a small move in volume can push the price way up or down.
The stock hit a 52-week high of Rs 118.38 in January, right as the reserve price was being set. After the sale was scrapped, it fell roughly 19% and closed at Rs 74.28 on April 7.
In other words, the government priced the bank off a peak the market couldn't sustain.
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The government holds 45.48% of IDBI Bank. Life Insurance Corporation of India - the state-owned insurer - holds another 49.24%.
Together they plan to sell 60.72% of the bank, which would hand control to the buyer.
After the sale, the government would keep 15% and LIC would keep 19%. Both would stay on as minority owners without the ability to call the shots.
Officials are now running a fresh look at the value. They may let earlier bidders skip the security and "fit and proper" checks they already passed.
That would speed up a second attempt without redoing every step.
A successful sale would be the biggest sell-off of an Indian state-owned bank in years. Prime Minister Narendra Modi's government has staked a lot of its credibility on getting it done.
IDBI Bank has cleaned up its books in recent years, with bad loans down and profits up. That makes the timing right for a sale, if the price works.
The next sign will come from the panel of ministers running the sale. It can open a new bidding window quickly if it signs off on the lower reserve price.
A second failure would raise the question of whether India can really privatize state banks at all.
The buyers showed up the first time. The government just has to meet them somewhere reasonable.
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