Govt may sell part of its stake in IDBI bank to India's top insurer LIC

India’s government is likely to sell a part of its stake in IDBI Bank Ltd. as early as next month and potential buyers include the country’s top insurer, said people familiar with the matter.

Potential investors would include Life Insurance Corporation, the people said, asking not to be identified as the information isn’t public. The sale would lower the government’s stake to below 50 percent from about 81 percent, they said.

India has been trying since at least two years to sell IDBI Bank, which has the highest bad-loan ratio among state-run lenders in India. India Ratings & Research Pvt., the local