According to stock market experts, the GoI's divestment plan may transform IDBI Bank from a traditional lender into a diversified financial services company offering banking, insurance, wealth management and investment banking. However, they maintained that such a transformation doesn't happen overnight and it takes time. So, long-term investors may take advantage of this crash in IDBI Bank shares and begin accumulating them in a calibrated manner.
Highlighting the reason for IDBI Bank's share price slide, Avinash Gorakshkar, Founder of Avinash Mentor Research, said, "The IDBI Bank stake sale is aimed at meeting the SEBI guidelines and its FY27 divestment target of ₹80,000 crore. However, it doesn't mean they will offload their entire stake. They would remain there, along with the expertise of Prem Watsa, the CEO of Fairfax. However, this will take time and the recent crash should be seen as a panic sale. Once the IDBI Bank-Fairax stake sale is complete, even after that it will take time for the IDBI Bank to get transformed from a normal Indian lender to a diversified financial services provider company.
Expecting the IDBI Bank share price crash to end soon, Abhinav Tiwari, Sr. Research Analyst at Bonanza, said, “At around 1.37x June 2026 book value and 11.5x annualised Q1FY27 earnings, much of the deal-related optimism may already be priced in.”
The Bonanza expert said that future returns will depend on improving return on equity. Fairfax has proposed contributing its interests in Go Digit Life Insurance, Go Digit General Insurance and IIFL Capital Services to IDBI Bank after acquiring control. The plan could transform IDBI Bank from a traditional lender into a diversified financial services company offering banking, insurance, wealth management and investment banking.
Abhinav Tiwari of Bonanza said that IDBI Bank's stake sale is an important step for the government’s disinvestment programme. The focus now shifts from deal completion to earnings growth, execution and future share supply. Other PSU stocks may benefit from expectations of privatisation, but the timing and outcome of each sale remain uncertain.