The disinvestment process for IDBI Bank is progressing with financial bids expected to be invited soon, marking a significant advancement in the government's privatization agenda for the public sector bank.

Disinvestment Timeline

The move to invite financial bids represents a crucial step forward in the IDBI Bank privatization process. This development indicates that the preliminary phases of the disinvestment have been successfully completed, bringing the transaction closer to its final stages.

Strategic Significance

The IDBI Bank disinvestment forms part of the government's broader strategy to reduce its stake in public sector enterprises. The bank's privatization has been a key component of the government's disinvestment program, aimed at improving operational efficiency and unlocking value for stakeholders.

Market Impact

The progression to the financial bidding stage is expected to generate significant interest from potential investors and strategic buyers. The completion of this phase will be closely monitored by market participants as it represents one of the major banking sector privatizations in recent years.

India's small business credit market reached ₹46 lakh crore with 16.2% year-on-year growth, driven by a significant increase in first-time borrowers and expanding NBFC participation across segments, according to the latest CRIF–SIDBI Small Business Spotlight Report.

Growing Participation from New Borrowers

The report highlights a notable trend towards market formalization, with 23.3% of small business borrowers being new to credit and 12% borrowing for an enterprise for the first time. This influx of new participants has contributed to substantial growth in active loan accounts, which rose 11.8% to reach 7.30 crore.

Market Structure and Segment Performance

Sole proprietors continue to anchor the small business credit ecosystem, accounting for nearly 80% of total credit exposure and close to 90% of all borrowers. The fastest growth is emerging among sole proprietors with a formal enterprise footprint, where credit exposure expanded 20% year-on-year.

NBFCs have significantly strengthened their role among sole proprietors, now accounting for over 41% of lending in this segment, reflecting their expanding reach into smaller and under-penetrated markets.

Credit Structure and Product Mix

Working capital loans constitute nearly 57% of enterprise credit outstanding, highlighting ongoing liquidity requirements for formal businesses. Among sole proprietors, loans against property dominate the portfolio, followed by business loans and commercial vehicle financing.

Unsecured lending experienced particularly sharp growth of 31% year-on-year, even as lenders maintained overall portfolio discipline and risk management practices.

Geographic Expansion and Asset Quality

Credit distribution continues to expand beyond major urban centers, with Maharashtra, Tamil Nadu, Uttar Pradesh, and Gujarat leading in overall portfolio size. Faster growth rates are emerging in states such as Telangana, Andhra Pradesh, and West Bengal.

Asset quality trends support the positive growth trajectory. Loans overdue by 91 to 180 days declined to approximately 1.40%, down from 1.70% two years earlier. The share of very low-risk and low-risk borrowers increased across both enterprises and sole proprietors.

Odisha exemplifies this balanced growth approach, with small business credit expanding 17.2% year-on-year to ₹96,000 crore, exceeding the national average. Credit growth in the state's aspirational districts crossed 22% while coinciding with improving delinquency trends, demonstrating successful credit expansion into newer regions without materially weakening overall risk profiles.