IDBI Bank Ltd

Market rumours clarification

• Responds to BSE clarification on Oct 14, 2026 news item and price movement.
• Strategic disinvestment is being pursued through competitive bidding; details were disclosed to exchanges on Oct 14, 2026.
• No further material information beyond the Oct 14 filing regarding negotiations or price movement is provided.
• Bank states it has timely intimated stock exchanges of price-sensitive information per SEBI LODR.
• No governance changes or appointments are disclosed in this response.

Deal overview

• CCEA approved strategic restructuring, selling 60.72% stake in IDBI Bank to Fairfax affiliate.
• Purchase consideration: Rs 52,878.08 crores for 60.72% stake.
• GoI to retain 15% residual equity; LIC will retain 19%.
• Bids and valuations: two methods used; benchmark Rs 75.99 per share.
• Winning bid price Rs 81 per share; higher than benchmark and fair value.
• Regulatory steps: RBI Fit and Proper and other regulatory approvals required.
• Residual governance: GoI and LIC to withdraw nominees from the IDBI Bank Board.
• Outcome: expected to be the largest FDI in financial sector.
• Open market sale of residual GoI stake via Alternative Mechanism; LIC manages its stake.

IDBI Bank Ltd – Closure of trading window

Instruments rated

• Fixed deposits: IND AA/Stable affirmed.
• Certificate of deposit: IND A1+ affirmed (Up to 365 days).
• Senior debt: rating withdrawn.
• Omni Infrastructure bonds: rating withdrawn.
• Basel III Tier II bonds: rating withdrawn.

Rationale and key drivers

• Comfortable capital position with CET1 26.38% in 1QFY27.
• Stable CASA and retail-focused franchise supporting funding and earnings.
• Asset quality improving; gross NPAs 2.30% in 1QFY27.
• Profitability improved; NIM ~3.6% and lower credit costs.
• GoI/LIC divestment plan monitored as rating monitorable.

Liquidity and sensitivities

• Liquidity adequate; LCR 120.87% in 1QFY27.
• Positive sensitivities: franchise growth, profitability, and higher capital buffers.
• Negative sensitivities: CET1 sustained below 12%, rising NPAs, or funding erosion.

Outlook and changes

• Outlook: Stable for fixed deposits; COD outlook not specified.
• Divestment plan by GoI/LIC remains rating monitorable.

Disinvestment clarification

• Strategic disinvestment is being conducted through competitive bidding under GOI guidelines.
• IDBI Bank has had no role in the IIFL Finance matter.
• Bank is not aware of information behind trading movements and will disclose material information promptly.
• No regulatory or legal proceedings related to the referenced news report at bank level.
• Bank has consistently disclosed price-sensitive information to exchanges as required by SEBI LODR.

Change in Senior Management Personnel

• Shri Sunit Sarkar ceases to be Executive Director due to superannuation, effective Aug 31, 2026.

Rating Action

• ICRA reaffirmed IDBI Bank's long-term ratings at AA (Stable) and short-term at A1+.
• Certain bonds were fully redeemed and withdrawn (infrastructure ₹1,000 crore; Basel III Tier II ₹1,900 crore).

Instruments Rated

• Infrastructure bonds ₹10,000 crore: AA (Stable) reaffirmed.
• Infrastructure bonds ₹1,000 crore: AA (Stable); reaffirmed and withdrawn.
• Senior bonds ₹3 crore: AA (Stable).
• Basel III Tier II bonds ₹3,100 crore: AA (Stable).
• Basel III Tier II bonds ₹1,900 crore: AA (Stable); reaffirmed and withdrawn.
• Fixed deposits programme: AA (Stable).
• Certificates of deposit ₹35,000 crore: A1+.

Rationale & Key Metrics

• Profitability improving; recoveries from stressed assets aid earnings.
• Tier I 26.38% and CRAR 26.92% as of 30 Jun 2026.
• Liquidity robust: LCR 120.87%, NSFR 115.61%.
• NIMs expected to compress near term due to funding costs.
• Vulnerable loan book SMA 1.74% of standard advances as of 30 Jun 2026.
• Deposit growth steady; CASA 43.64%; ownership change monitorable.
• Ongoing ownership transition with GoI/LIC; final stakeholder alignment awaited.

Outlook & Sensitivities

• Outlook: Stable.
• Upward rating potential if market position, asset quality, profitability strengthen with capital cushions.
• Downgrade risk if asset quality deteriorates or RoA falls below 0.8% and capital cushions fall below 3%.