The Indian government has announced its intention to complete the sale of its stake in IDBI Bank by the end of the fiscal year 2026 (FY26), marking a significant step in its divestment process for public sector banks.

Key Points of the Announcement

• Divestment Timeline: The government aims to finalize the sale of its IDBI Bank stake by the end of FY26.
• Strategic Move: This decision represents a crucial part of the government's ongoing efforts to reduce its presence in the banking sector.

IDBI Bank's Current Status

IDBI Bank, a former public sector bank, has been classified as a private sector lender following Life Insurance Corporation of India (LIC) acquiring a majority stake. The government and LIC are now looking to divest their stakes in the bank.

Recent Developments

According to a recent notice published by IDBI Bank on October 7, 2025, the bank has opened a special window for re-lodgement of transfer requests for physical shares. This move aligns with the Securities and Exchange Board of India (SEBI) circular dated July 2, 2025.

This initiative by IDBI Bank to address shareholder concerns regarding physical share transfers demonstrates the bank's commitment to enhancing shareholder services, which could potentially impact the valuation and attractiveness of the bank to potential buyers.

Implications of the Stake Sale

The government's plan to complete the IDBI Bank stake sale by FY26 signals its commitment to the disinvestment process in the banking sector. This move is expected to:

1. Reduce the government's financial burden
2. Potentially improve the bank's operational efficiency
3. Attract private investment into the banking sector

As the deadline approaches, market observers will be keenly watching the progress of this divestment process and its impact on the broader banking landscape in India.

IDBI Bank , a prominent player in India's banking sector, has reported significant growth in its business operations. The bank's performance shows a mix of robust growth in some areas and challenges in others.

Business Growth and Deposits

IDBI Bank has demonstrated strong business growth, with its total business increasing by 12% year-on-year to ₹5,33,839 crore. This growth is supported by increases in both deposits and advances:

The bank's deposit base grew by 9% to reach ₹3,03,531 crore, while CASA (Current Account Savings Account) deposits increased by 4% to ₹1,39,056 crore. This growth in CASA deposits is particularly important as it represents low-cost funds for the bank.

Loan Book and Asset Quality

Net advances showed a robust growth of 15%, reaching ₹2,30,308 crore. This significant increase in the loan book indicates strong credit demand and the bank's ability to capitalize on market opportunities.

Asset quality metrics showed mixed results:

• Gross Non-Performing Assets (NPA) ratio improved to 2.93% from 2.98%
• Net NPA ratio increased to 0.21% from 0.15%

While the reduction in Gross NPA is a positive sign, the slight increase in Net NPA warrants attention and may require enhanced monitoring of the loan portfolio.

Financial Performance

The bank's financial performance was marked by strong profit growth despite challenges in interest income:

IDBI Bank reported a significant 16.8% jump in net profit to ₹2,007.40 crore. This impressive growth in profitability was achieved despite a 2% decline in Net Interest Income, which stood at ₹3,165.80 crore.

A key factor contributing to the profit growth was a provision write-back of ₹385.30 crore, which helped offset the impact of reduced interest income.

Key Ratios and Market Performance

• Return on Assets improved to 2.01%, indicating better utilization of the bank's assets
• Net Interest Margin contracted to 3.68% from 4.18%, reflecting pressure on interest spreads

The bank's shares closed at ₹92.58, up 0.22%, suggesting a neutral market reaction to the results.

Conclusion

IDBI Bank's performance reflects a bank navigating both opportunities and challenges. While the strong growth in total business, advances, and net profit are encouraging signs, the contraction in Net Interest Income and Net Interest Margin suggests ongoing pressures in the core banking operations. The bank's ability to maintain this growth trajectory while managing asset quality and improving core profitability will be key factors to watch in the coming periods.