Financial bids from Kotak, Emirates NBD, Fairfax received for IDBI Bank privatisation

The government and Life Insurance Corporation of India (LIC) are jointly selling a 60.72 percent stake in IDBI Bank

• Kotak Mahindra, Emirates NBD, and Fairfax India submit bids for IDBI Bank stake
• Government and LIC to sell 60.72 percent stake, transferring management control
• Bids will be assessed on price, regulatory, and qualitative factors before approval.

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Financial bids from Kotak Mahindra Bank, Emirates NBD and Fairfax India Holdings have been received for the strategic disinvestment of IDBI Bank. All three financial bids submitted by the shortlisted bidders will now be evaluated, sources said.

“All three shortlisted bidders have submitted financial bids. The final selection will not be based on price alone, and several qualitative and regulatory factors will also be taken into account,” a source told Moneycontrol on the condition of anonymity.

Earlier, the Department of Investment and Public Asset Management (DIPAM) confirmed the receipt of financial bids. “Financial bids have been received for the strategic disinvestment of IDBI Bank. They will be evaluated as per the prescribed procedure,” the DIPAM secretary said in a social media post on February 6.

The receipt of final financial offers from shortlisted bidders moves the transaction into its decisive evaluation phase.

Who are the bidders

As reported earlier by Moneycontrol, Kotak Mahindra Bank, Fairfax India Holdings led by investor Prem Watsa, and Emirates NBD had qualified to participate in the strategic disinvestment process and were eligible to submit financial bids for IDBI Bank.

The three bidders were allowed to move to the final stage of the process after completing due diligence and clearing the technical bid stage.

Stake sale structure

The strategic sale involves the transfer of management control along with a majority stake in the bank. The government and Life Insurance Corporation of India (LIC) are jointly selling a 60.72 percent stake in IDBI Bank, comprising 30.48 percent held by the government and 30.24 percent by LIC.

The disinvestment is being pursued as part of the Centre’s broader strategic divestment programme aimed at raising non-tax revenues and reducing its presence in non-core sectors.

IDBI Bank’s privatisation process gained momentum after the lender exited the Reserve Bank of India’s Prompt Corrective Action framework in March 2021 following improvements in asset quality, capital adequacy and profitability. The exit from PCA was seen as a key condition for attracting private investors and reviving interest in the strategic sale.

Since then, the transaction has progressed through multiple stages, including the invitation of expressions of interest, due diligence by prospective bidders, submission of technical bids and access to the data room.

Next steps

With financial bids now in hand, the offers will be evaluated by the inter-ministerial group in line with the prescribed disinvestment procedure. The highest bidder will be identified after the evaluation, following which the proposal will move through the required approval process, including consideration by the Cabinet.

The IDBI Bank transaction is among the most closely watched strategic disinvestment deals currently underway and is seen as a test case for privatisation in the banking sector.