The All India Bank Officers’ Association (AIBOA) has raised serious questions over proposed strategic disinvestment of Government and stakes in , alleging wide valuation mismatches, inadequate transparency, and possible implications for minority shareholders.
The officers’ body has urged the Department of Investment and Public Asset Management (DIPAM) to make a “mid-course correction” to proposed transaction involving Canada-based Fairfax Holdings, arguing the reserve price and bank’s underlying asset values warrant a fresh review before the sale proceeds.
Projected deal size
At the proposed price of ₹81 a share, the Government could raise around ₹26,620 crore by selling a 30.48 per cent stake out of its 45.48 per cent holding. LIC, which owns just under 50 per cent of the bank, is also proposed to sell a 30.24 per cent stake. Together, the transactions would amount to about ₹53,000 crore, or $5.5 billion, according to figures cited by AIBOA.
AIBOA General Secretary S Nagarajan questioned the sharp reduction in proposed reserve price to ₹81 from ₹110 a share indicated as recently as January-February. At ₹110, the transaction value would have been about ₹70,000 crore, he said, arguing that there has been no adequate explanation for the roughly ₹17,000-crore difference.
Reserve price issues
In a letter to Arunish Chawla, Secretary, DIPAM, Nagarajan said the strategic disinvestment could not be conducted without adequate disclosure of valuation methodology and other material information. He also referred to reports that bids from interested parties in March had fallen below the Government’s expected reserve price, preventing the transaction from being concluded at that stage.
AIBOA’s principal objection centres on valuation of IDBI Bank’s extensive real estate holdings, which it says have not been adequately reflected in the proposed enterprise value. Nagarajan said market value of the bank’s properties should be taken into account while determining the value of the enterprise. In his view, proceeding with a sale at ₹81 a share without adequately accounting for these assets could prejudice minority shareholders and raise questions under applicable securities regulations.
Actual market value
The association has called for details of every property owned by the bank, including its book value and market value, to be placed on the websites of IDBI Bank and DIPAM before disinvestment is taken forward. An analysis of banks annual report for 2025-26 shows ₹8,880.83 crore under “Premises” in Schedule 10, relating to fixed assets. The association contends the market value of bank’s properties could be substantially higher.
As an example, Nagarajan cited a 50-acre property owned by IDBI Bank in Hyderabad. Based on a recent Telangana Government auction that indicated a value of around ₹269 crore an acre, he estimated market value of this single property at about ₹13,450 crore. If similar market-value considerations are applied to the bank’s properties across the country, the total real estate value could exceed ₹30,000 crore, he claimed.
Setback for LIC
AIBOA has also questioned whether the proposed price adequately protects LIC’s interest as a major shareholder. Nagarajan pointed out that LIC had invested at ₹61 a share when it acquired its stake in IDBI Bank in January 2019. After nearly seven years and eight months, he argued, a minimum valuation of twice the original investment, at ₹122 a share, would be appropriate from LIC’s perspective. Any sale below that level, he contended, could amount to a direct loss to LIC and, consequently, its policyholders.
Profitability track
The association has further based its case on IDBI Bank’s recent profitability. The bank has reported substantial net profits over the past six financial years, with net profit for 2025-26 placed at ₹9,513 crore. AIBOA argues that a profitable bank with significant property holdings should command a substantially higher enterprise value than that implied by proposed ₹81-a-share transaction.
Even under what it describes as a conservative, low-growth valuation methodology, the minimum price should be around ₹133 a share, Nagarajan said. Against this backdrop, he described the proposed ₹81 price as a significant valuation mismatch requiring reconsideration. He suspected the prospective strategic buyer could be more interested in monetising bank’s real estate holdings than expanding its banking business.
With the proposed acquisition potentially giving the buyer 60.72 per cent ownership and management control, AIBOA said the buyer could eventually seek to monetise the bank’s more than 2,000 properties at market prices, potentially unlocking substantial value that, in its view, is not adequately captured in transaction valuation.
Fairfax-CSB Bank link
AIBOA has also flagged potential ownership implications if Fairfax Holdings emerges as the successful strategic buyer. Fairfax already has a major stake and managerial control in Kerala-based CSB Bank. RBI rules governing promoter ownership and control of banks could therefore create an issue if Fairfax were to acquire control of IDBI Bank as well. Reports have suggested that Fairfax could be given a two-year window to resolve the overlap, potentially by reducing its stake in CSB Bank or exploring a merger of CSB Bank with IDBI Bank.
Open offer scope
The proposed strategic sale would also have implications beyond the Government and LIC block transactions. Under applicable SEBI regulations, a successful strategic buyer would be required to make an open offer to public shareholders, potentially increasing the buyer’s eventual capital commitment. AIBOA has therefore called for greater disclosure of the valuation exercise, particularly the market value of IDBI Bank’s real estate and the methodology used to arrive at the reserve price, before the strategic disinvestment is allowed to proceed.