Is IDBI Bank stock undervalued? It all hinges on the government’s potential stake sale.

The Indian government (holding 45.48%) and LIC (holding 49.24%) are jointly looking to sell a 60.7% stake in IDBI Bank and transfer management control. Bids received in February from Fairfax Financial, Emirates NBD, and Kotak Mahindra Bank were rejected in March for being below expected valuations, but the sale process was revived in April. If the divestment completes in FY27, IDBI Bank could see valuation re-rating closer to private sector bank multiples, as it currently trades at multiples between private and public sector peers.