KTR questions IDBI valuation

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Amid the row over the IDBI Bank disinvestment, BRS Working President K T Rama Rao on Saturday said reports of the bank's undervaluation were "really concerning." He noted that IDBI owns valuable real estate, including prime land in Hyderabad, and asked whether its value had been properly accounted for. "Reports about undervaluation of IDBI Bank are really concerning. Why were the rules and valuation methodology changed when bids fell below the reserve price?" he said in a post on X, responding to an appeal from the All India IDBI Officers' Association to raise the issue of the bank's privatisation.

He asked why the concerns raised by IDBI employees were not being addressed. "Before selling off a reputed public sector bank to a private player, the union government owes the country some straight answers. What's the hurry?" he said.

Public sector undertakings and public sector banks are national assets that must be safeguarded, he added.

Responding on Friday to Congress leader Rahul Gandhi's criticism of the NDA government over the disinvestment, Union Finance Minister Nirmala Sitharaman said IDBI Bank "was handed over to us in poor shape, as IDBI itself was forced to lend to large business groups with close connections to @INCIndia leaders such as Videocon, Winsome, ABG Shipyard, and Kingfisher."

"These turned into bad loans, causing huge losses for IDBI Bank, which we recognised," she said in a social media post.

"The NDA govt led by Hon'ble PM Shri @narendramodi revived the IDBI Bank through professionalism, prudence and recapitalisation of more than Rs 25,000 crore. The IDBI Bank is now poised for its next phase of growth," she said, adding that all due process had been followed in the bank's strategic restructuring.

On Thursday, the Department of Investment and Public Asset Management (DIPAM) said the second round of bidding was conducted under a procedure determined by the Core Group of Secretaries on Disinvestment (CGD). The Cabinet Committee on Economic Affairs (CCEA) had empowered the CGD to address procedural issues and deviations.

The first round of bidding was held in 2025-26, but the bids were not approved, after which that round became functus officio, or ceased to have further effect, DIPAM said in a statement.

The clarification followed questions from several quarters, including the bank's union, about IDBI Bank's valuation and the price quoted by the proposed bidder, Canada's Fairfax Financial Holdings.

On October 14, the government approved the sale of a 60.72 per cent stake in IDBI Bank to Fairfax for about Rs 53,000 crore (USD 5.5 billion). It would be the largest foreign investment in an Indian bank and a major milestone in the country's long-delayed bank privatisation drive. The transaction is expected to be completed by the end of the current financial year, subject to regulatory clearance from the Reserve Bank of India.