MC EXCLUSIVE Govt set to exit IDBI Bank in FY26; Kotak, Emirates NBD, and Fairfax to place final bids this week

The government is expecting to fetch a revenue of about Rs 33,000 crore from IDBI stake sale.

The government aims to complete IDBI Bank's divestment in FY26, with Kotak Mahindra Bank, Emirates NBD, and Fairfax India Holdings submitting final bids for a 61% stake. The process involves DIPAM, IMG, and finance ministry approval.

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The government is set to complete the divestment process of IDBI Bank in the current financial year, a senior government official told Moneycontrol. Kotak Mahindra Bank, Emirates NBD and Fairfax India Holdings are set to submit their final bids this week to acquire 61 percent stake in the public sector bank, sources said.

The Central government and Life Insurance Corporation of India (LIC) jointly hold 90 percent stake in the IDBI Bank.

Sources privy to the matter say that one bid has been sent, and the rest are expected to follow "before the weekend".

The bids will be placed to the Department of Investment and Public Asset Management (DIPAM) in the finance ministry. The government is expecting to fetch a revenue of about Rs 33,000 crore – as it is divesting its 30.48 percent stake in IDBI Bank, say officials. LIC is offloading 30.24 percent stake in the bank.

Moneycontrol had reported on January 30 that three short-listed bidders--Kotak Mahindra Bank, Emirates NBD and Fairfax India Holdings-- have been asked to place final bids for the acquisition of 61 percent stake in IDBI Bank by February 5.

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. Once selected the proposal goes to the IMG for its recommendation, followed by approval from the finance minister.

"The entire process will be completed in FY26," the senior official quoted above said on Thursday.

In a post-Budget interaction on February 1, DIPAM Secretary Arunish Chawla had said that the strategic divestment of IDBI Bank had moved to the third phase – meaning technical and financial bids have been invited. "Before the end of the current financial year, we will be able to give further information in this matter," Chawla had said.

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.