Business EconomyPosted at: Oct 30 2026 1:33PM


Govt says IDBI Bank's transparent bidding process added Rs 3,917 Crore to deal value

New Delhi, Oct 30 (UNI) The Ministry of Finance has defended the valuation and bidding process for the strategic sale of IDBI Bank, stating that the procedure followed by the government helped enhance the transaction value by Rs 3,917 crore. The ministry said the Core Group of Secretaries on Disinvestment (CGD) was empowered to take decisions on the final round of bidding and resolve procedural matters to ensure a smooth disinvestment process.
The clarification comes after the Cabinet Committee on Economic Affairs (CCEA), on October 14, approved the strategic sale of a combined 60.72 per cent stake in IDBI Bank to Canadian investment firm Fairfax Financial Holdings. The transaction is valued at around Rs 53,000 crore, with the approved bid price fixed at Rs 81 per share. The ministry maintained that the reserve price remained unchanged throughout the process, adding that the initial bidding round was closed after the offers received were not approved.
Explaining the bidding mechanism, the ministry said the first round was conducted by the Department of Investment and Public Asset Management (DIPAM) during FY26 under its established internal practices. These practices serve as indicative guidelines and are not rigid rules or statutory requirements. It added that there is no predetermined benchmark for bidding, as prospective buyers independently assess a company's value before submitting confidential offers.
The government appoints independent valuation agencies to assess the enterprise and uses their findings as a reference point to determine whether the bids received are reasonable. However, the ministry clarified that the market-discovered bid price and the independent valuation may differ, with either potentially being higher than the other. Since DIPAM did not have a prescribed mechanism to address such situations, the CCEA delegated special powers to the CGD to take appropriate decisions.
On the valuation methodology, the ministry said the CGD reviewed and approved the framework in April 2026, ahead of the best-offer bidding round. Valuation agencies began updating their assessments in May, after IDBI Bank's financial results for the year ended March 31, 2026, became publicly available towards the end of April. This ensured that the valuation reflected the latest financial information available at the time of bidding.
The ministry also asserted that adequate safeguards were maintained to protect the confidentiality of the exercise. The bidding process followed a double-blind mechanism, under which bidders were not aware of the valuation figures, while valuation agencies had no access to the offers submitted. Only the CGD had access to both sets of information to evaluate the bids against independent valuations and determine their reasonableness.
The valuation exercise was carried out by two independent advisers using separate methodologies. The transaction adviser undertook the business valuation and engaged specialists trained in the Market Multiple Method, taking into account the complexity of the transaction.
The ministry further clarified IDBI Bank's ownership status, stating that the lender was classified as a government-owned bank until 2019. Following the acquisition of a majority stake by Life Insurance Corporation of India (LIC) in that year, it became a government-controlled bank.
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