Government Checking Price Bids for IDBI Bank Sale

Current Status

Government sources report that authorities are currently checking financial bids for the major stake sale of IDBI Bank. This process is moving forward at a steady pace, though officials have not shared extra details yet.

The Bidders

Two major groups submitted revised financial bids in July to buy a 60.72 percent stake in the lender. These groups are Fairfax Financial Holdings, backed by billionaire investor Prem Watsa, and Emirates NBD from Dubai. Both buyers already possess security clearance from the Ministry of Home Affairs along with the 'Fit and Proper' assessment from the Reserve Bank of India. Furthermore, both parties bring prior banking experience in India. Emirates NBD acquired a majority stake in RBL Bank earlier this year, while Fairfax Financial holds a 40 percent stake in CSB Bank.

Background

This marks the second time these interested parties have placed financial bids. The government first invited Expressions of Interest for the strategic sale back in October 2022. After completing due diligence and regulatory clearances, financial bids arrived on February 6. Those initial offers fell below the reserve price set by the Inter-ministerial group on disinvestment, which led authorities to pause the sale. The process restarted this financial year when the government invited fresh proposals, and the revised bids came in on July 13.

Shareholding

At present, the central government and state-owned Life Insurance Corporation together own a 94.71 percent stake in IDBI Bank. The government holds 45.48 percent, while LIC owns 49.24 percent. Through this strategic sale, they plan to offload a combined 60.72 percent stake, which includes 30.48 percent from the Centre and 30.24 percent from LIC.