MC EXCLUSIVE DIPAM sets February 5 deadline for final IDBI Bank bids

IDBI Bank

• IDBI Bank divestment final bids due by Feb 5 from three shortlisted bidders.
• Kotak Mahindra Bank, Emirates NBD, and Fairfax India Holdings invited to bid
• Winner identified by March 2026; Cabinet approval needed for handover.

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The divestment of IDBI Bank is said to have entered the last leg . Highly placed sources aware of the development say shortlisted bidders have been asked to place final bids by February 5 . “An invite for final bid along with the deadline was sent to select bidders,” said a highly placed sources who didn’t want to be named. The communication was sent from DIPAM (Department of Investment and Public Asset Management) to the three contenders, namely Kotak Mahindra Bank, Emirates NBD and Fairfax India Holdings around the third week of January this year.

“It has been sent along with the final bid document and bidders will quote the acquisition price in the final bid”, said another source.

Given that IDBI Bank is a listed entity, the final bid price is expected to reflect the acquisition price applicable for takeovers as per Sebi norms. Emails sent to DIPAM, Kotak Mahindra Bank, Emirates NBD, and Fairfax India Holdings remained unanswered till publishing the article.

Selection process

Once financial bids are submitted, sources say the bids will be opened in the presence of the transaction advisers, members of the inter-ministerial group (IMG) and authorised representatives of the bidders. “The evaluation and identification of H1 is a fairly straightforward exercise and does not take much time,” the source added. “Once selected the proposal goes to the IMG for its recommendation, followed by approval from the finance minister.

Depending on the strategy adopted by the government and the readiness of bidders, it is possible to move ahead with the process within the current quarter,” said the person cited above, indicating the clear winner for IDBI Bank divestment may be identified by March 2026.

The final handover to the successful bidder though would depend on how quickly the next steps are carried out  and the preparedness of the winning bidder to pay the sale consideration. To be sure, as per the RFP, the successful bidder is expected to pay the full consideration by cash. Though not explicitly mentioned, the identity of IDBI Bank should also be preserved post the divestment process.

“The final approval of the successful bidder is likely to go to the Cabinet, once the IMG clears the name,” a government source told Moneycontrol.

While the proposal for disinvestment of IDBI Bank was first mooted in February 2020 when the finance minister presented her Budget for FY21, a request for proposal (RFP) was sent in October 2022. The Reserve Bank of India is said to have cleared four interested bidders from a ‘fit and proper’ standpoint – namely Kotak Mahindra Bank, Fairfax India Holdings, Emirates NBD and Oaktree Capital. In January 2025, Moneycontrol reported that a closing due diligence was underway at IDBI Bank and over a year later, final bids are being called  by DIPAM.

Life Insurance Corporation of India and the government are set to offload 30.24 percent and 30.48 percent stake respectively in the bank.