IDBI Bank shares rose more than 3 percent during early trading on July 14 following reports that the government has approved the strategic disinvestment of the bank, marking a significant step forward in its long-pending privatization process. The stock later traded around 2 percent higher on the NSE after paring some of its initial gains.

The latest development follows a series of high-level meetings held on July 13 to review the progress of the proposed stake sale. According to government sources, the Core Group of Secretaries on Disinvestment (CGD) and the Inter-Ministerial Group (IMG) convened separately to assess the status of the strategic disinvestment. The IMG meeting was co-chaired by the Secretary of the Department of Financial Services and the Secretary of the Department of Investment and Public Asset Management (DIPAM).

Under the proposed transaction, the Government of India and Life Insurance Corporation of India (LIC), which together own nearly 95 percent of IDBI Bank, plan to sell a combined 60.72 percent stake along with management control. The government intends to divest a 30.48 percent stake, while LIC will sell 30.24 percent of its holding.

The strategic sale is expected to facilitate the privatization of IDBI Bank and attract long-term investors capable of strengthening the bank's operational and financial performance.

Among the interested bidders, Canada-based Fairfax Financial Holdings has emerged as one of the prominent contenders. Its subsidiary, Fairfax India Holdings, has submitted an Expression of Interest (EoI) and remains part of the strategic disinvestment process.

The proposed divestment is one of the government's key privatization initiatives and forms part of its broader strategy to monetize public assets while improving efficiency in the banking sector. Further progress in the transaction will depend on the completion of the ongoing evaluation and bidding process.