These 2 companies are eyeing a stake in IDBI Bank
What's the story
Fairfax Financial and Emirates NBD have submitted financial bids for the strategic disinvestment of IDBI Bank. The Department of Investment and Public Asset Management (DIPAM) confirmed that it has received these bids and will evaluate them as per the prescribed procedure. Kotak Mahindra Bank was also in the race but has clarified that it hasn't submitted any financial bid and is not participating in this round.
Regulatory clearance
RBI has issued 'fit and proper' certificates to bidders
The Reserve Bank of India (RBI) has issued 'fit and proper' certificates to the shortlisted bidders, allowing them to take part in the stake sale process. This clearance was mandatory for accessing the bank's data room and proceeding with bidding. The Centre plans to sell a 60.72% combined stake in IDBI Bank, which includes a 30.48% share held by the Indian government and a 30.24% share held by Life Insurance Corporation of India (LIC).
Bid evaluation
Key conditions for bidders
The government has retained the right to reject any bid, in consultation with RBI. The sale process needs unconditional offers and any bid with conditions would be invalid. Bidders cannot seek amendments to the share purchase agreement after submitting their bids to DIPAM. If Fairfax wins the bid, it may consider merging CSB Bank and IDBI Bank later, subject to regulatory approvals.
Privatization timeline
Privatization process ongoing for over 3 years
The privatization process for IDBI Bank has been ongoing for over three years. The government hopes to announce the successful bidder by March 2026, but the transaction could extend into the next financial year due to regulatory approvals and procedural requirements. The Centre plans to sell its 30.48% stake in IDBI Bank, valued at around ₹36,000 crore at current market prices. LIC will also divest a 30.24% stake simultaneously, bringing the total shareholding on offer to 60.72%.