LIC, IDBI disinvestment moves forward amid Govt sale push

The process for selling minority stake sale in LIC and the strategic sale in IDBI Bank has gained momentum, a senior government official has said. While no timeline is given for LIC, the IDBI Bank sale process is likely to be completed by October.

As of date, the government holds a 96.5 per cent stake in LIC. The Securities and Exchange Board of India (SEBI) has extended the deadline until May 16, 2027, to meet the 10 per cent public shareholding requirement. As the current public shareholding stands at 3.5 per cent, it has to sell 6.5 per cent. According to the official, given the prevailing market conditions, selling 6.5 per cent in one go may not be a good idea. Therefore, the plan is to sell in tranches through the Offer for Sale route.

“There is approval from the government for further share sale. Now, it is up to the DIPAM (Department of Investment and Public Asset Management) to look at the market conditions and conclude the stake sale,” an official said. The quantum of stake sale, price and timing would be decided in due course, he added.

The government had divested 3.5 per cent in LIC through an initial public offering (IPO) in May 2022 at a price band of ₹902-949 a share. The share sale fetched the government around ₹21,000 crore. LIC’s current market capitalisation stands at ₹5.85 lakh crore. Shares of LIC were trading at ₹924.40 apiece, down 2.27 per cent over the previous close on the BSE.

IDBI Bank

Meanwhile, the official said that the strategic sale of IDBI Bank is expected to be completed within the next four months.  This is the first of its kind strategic disinvestment of a bank which is owned by one government-owned entity, while the government itself owns a good number of shares. LIC holds 49.24 per cent, while the government has 45.48 per cent in IDBI Bank.

In the strategic disinvestment of IDBI Bank, the preliminary information memorandum (PIM) for inviting an expression of interest (EOI) was published on October 7, 2022. It was mentioned that the government will sell 30.48 per cent and LIC will divest 30.24 per cent, aggregating to 60.72 per cent, along with a transfer of management control to IDBI Bank.

According to the official, the government has discussed the share purchase agreement, which will be shared with bidders submitting financial bids. In October 2022, the government, together with LIC, had invited EoI (Expression of Interest) from investors for privatising IDBI Bank by selling a total of 60.72 per cent stake. This includes a 30.48 per cent stake of the Government of India and 30.24 per cent of LIC.

The official stated that the due diligence process for the data room is currently underway, and the government will soon invite financial bids. Pursuant to inviting EoIs in October 2022, the DIPAM, in January 2023, received multiple EoIs for IDBI Bank. The prospective buyer of IDBI Bank has already been granted security clearance by the Ministry of Home Affairs (MHA) and cleared fit and proper evaluation by the Reserve Bank of India (RBI).

Shares of IDBI Bank were trading at ₹99.50 apiece, down 0.40 per cent from the previous close on the BSE.

Published on July 10, 2025