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forum flags hidden value in land, properties Many properties may have been acquired decades ago at historical costs,
while current commercial value in metropolitan and prime urban locations, could be substantially higher By Vinson Kurian
Updated - August 29, 2026 at 12:28
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The United Forum of IDBI Officers and Employees has urged Parliament’s Standing Committee on Finance to examine the
valuation methodology for IDBI Bank’s proposed divestment, including its land, buildings, franchise value and other
legacy assets. | Photo Credit: NIHARIKA KULKARNI The United Forum of IDBI officers and Employees has called the
attention of the Chairperson and members of the Standing Committee on Finance in Parliament to the valuation methodology
being adopted for the proposed divestment of IDBI Bank (NSE stock symbol: IDBI).IDBI is not merely a quoted equity
security, the Forum said in its representation. A strategic acquirer would obtain control not just over an established
banking licence but also a nationwide branch network; a significant deposit franchise; millions of customer
relationships; technology infrastructure; trained manpower; institutional relationships; brand and goodwill; substantial
immovable property accumulated over decades.Land, office buildingsAccordingly, the Committee should examine whether the
transaction valuation adequately captures the market value, book value, replacement value, franchise value, strategic
value, embedded property value, and long-term public development value. A strategic disinvestment of this nature cannot
be judged only by the prevailing market price of shares.IDBI has accumulated land, office buildings, residential
premises, training establishments and other immovable properties over more than six decades. Many such may have been
acquired decades ago at historical costs, while current commercial value in metropolitan and prime urban locations could
be substantially higher.Transaction priceIt is therefore essential to ascertain the total number of significant
properties; their book value; their independently assessed current market value; their development potential; whether
all such value is incorporated in the proposed transaction price; and whether independent asset valuers have been
appointed.Without such an examination, there is a serious risk that a bidder could acquire not merely a profitable bank
but also a valuable real estate portfolio whose latent value may subsequently be unlocked privately. Publicly
accumulated property must not become an unintended windfall embedded in a strategic sale, the Forum said.Binding
safeguardsOnce private control passes to a strategic investor, properties regarded as operationally surplus could be
sold, leased, redeveloped, or otherwise monetised, subject to applicable law and regulatory conditions. If their current
market value runs into thousands of crores, subsequent monetisation could enable the acquirer to recover a substantial
proportion of the acquisition cost from assets accumulated during public ownership.The committee should therefore
examine whether the proposed Share Purchase Agreement and regulatory conditions provide binding safeguards regarding the
disposal of significant legacy properties; redevelopment; monetisation proceeds; related-party transactions; extraction
of value by controlling shareholders; dividend distribution following major asset sales; and regulatory approval for the
disposal of material assets.Legal audit neededThe Committee may also examine whether any significant IDBI properties
were historically obtained through compulsory acquisition or concessional allotment based on government ownership;
public purpose; development-finance functions; concessional institutional status; conditions imposed by state
governments or public authorities.“We do not suggest that every such property automatically reverts upon
privatisation. That would depend upon the specific title, statute, grant conditions and acquisition history. Precisely
for this reason, a property-by-property legal audit is essential before the transfer of controlling ownership.” The
Committee may seek details of the mode of acquisition; the acquisition statute; the original public purpose; the grant
or allotment conditions; the reversion clauses; the change-of-control restrictions; and the rights, if any, of state
governments or original landholders, the Forum said. Comments Published on August 29, 2026 READ MORETHIS AD SUPPORTS OUR
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