The Centre has clarified the valuation and bidding procedures followed in the proposed strategic disinvestment of IDBI Bank, stating that the process allowed flexibility to address the complexities of the transaction while ensuring independent valuation of bids.
In a press note dated October 14, 2026, the government explained that the initial bidding round was conducted by the Department of Investment and Public Asset Management (DIPAM) in FY26 under indicative guidelines that permit procedural adjustments in the interest of timely execution.
Second bidding round followed CGD decision
The government said there is no predetermined benchmark for bids. Bidders independently value the enterprise and submit confidential offers, which are assessed against contemporaneous valuations by independent agencies. The discovered bid price can be either above or below the valuation.
The request for proposal (RFP) provides that if the highest financial bid is below the reserve price, the government will decide the next course of action, and qualified bidders cannot challenge that decision.
Empowering CGD
The Cabinet Committee on Economic Affairs (CCEA), in August 2017, had empowered the Core Group of Secretaries on Disinvestment (CGD) to resolve procedural difficulties and approve necessary deviations for effective implementation of strategic disinvestment decisions.
The CGD subsequently determined the procedure for the second, or best-offer, round after the initial bids were not approved.
Independent valuations used
The government said the reserve price was neither increased nor reduced between the rounds. The CGD reviewed the valuation methodology in April 2026, and independent agencies began revised valuations in May after the March 31 financial accounts entered the public domain.
The process was kept double-blind, with bidders unaware of the valuations and valuers unable to access the bids. The CGD alone had access to both sets of information to assess the reasonableness of the offers.
Two independent advisers used distinct methodologies. The transaction adviser engaged experts to apply the Market Multiple Method, using listed public sector banks as comparable companies because suitable comparable transactions were unavailable.
Tax indemnity and bid value
The asset valuer also included additional value for disputed tax demands, which were indemnified at the request of qualified bidders. The government said the potential liability was ₹627 crore, while the discovered bid price increased by ₹3,917 crore, enhancing the value of the transaction for the government and Life Insurance Corporation of India (LIC).
The government also explained why IDBI Bank’s volatile, thinly traded stock price was excluded from the valuation. It noted that the government and LIC would retain residual shareholdings, allowing them to benefit from potential appreciation following the bank’s strategic restructuring.