The Centre is pushing for a valuation of around ₹64,000 crore for IDBI Bank . in what could be the biggest sale of the government’s stake in a public sector bank in decades, according to a person familiar with the matter.

The government earlier this month invited bidders for a 60.72 per cent stake in the Mumbai-listed lender.

The valuation target means the government is seeking a premium of roughly 33 per cent, based on IDBI Bank’s market value of about $5.8 billion as of Thursday close.

Shares of IDBI Bank rose as much as 3 per cent on Friday after the Bloomberg News report.

IDBI Bank’s improved profitability could support the valuation target, said the person, who asked not to be identified as the information is confidential. Potential investors ranging from domestic and foreign banks to non-banking financial companies and private equity funds have expressed initial interest in the asset, the person added.

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Bidders could get regulatory approvals and security clearances after November as the process proceeds, according to the person. A sale of the majority stake could be completed as soon as in the next fiscal year starting from April 1, the person said. The federal government and the state-owned Life Insurance Corp. of India together own about 95 per cent in IDBI Bank.

A spokesperson for the Ministry of Finance declined to comment.

The IDBI Bank stake sale is a test case for Prime Minister Narendra Modi, who has committed to divest from most large businesses the government owns, and use the funds to bolster public finances.

After years of trying, the government has only been able to privatise national carrier Air India and introduce outside backers to LIC, while its plans to sell refiner Bharat Petroleum hit a wall as bidders struggled to find partners.

The government has been slow in raising funds from disinvestment this year.

The annual budget earmarked ₹65,000 crore from asset sales for the current fiscal year, but it has raised just over a third of the target, primarily from the $2.7 billion initial public offering of LIC in May.

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Just four years ago, IDBI Bank had the highest bad-loan ratio among banks in the nation.

Rakesh Sharma, the lender’s chief executive officer, came out of retirement in 2018 to helm a revamp.

About ₹19,500 crore of bad debt could be recouped, Sharma said in an interview in August.

The bank reported a 25 per cent jump in net income from a year ago for the three months ended June. It’s due to release its second-quarter earnings on Friday.

IDBI Bank was penalised by the RBI in 2017 with several restrictions on lending after its bad-loan ratio surged and capital ratios depleted.

LIC acquired 51 per cent of the lender in 2019 in a government bailout of the firm. The Reserve Bank of India (RBI) removed sanctions on the bank last year paving the way for its proposed sale.