- Government invited financial bids for strategic disinvestment of IDBI Bank
- Centre plans to divest 30.48% stake, LIC to sell 30.24%, totaling 60.72% stake sale
- Fairfax Financial and Kotak Mahindra Bank are leading contenders for IDBI Bank asset
The government has formally invited financial bids for the strategic disinvestment of IDBI Bank Ltd., said top sources in the government. The move marks a crucial step in the long-pending privatisation of the lender.
This followed the completion of all key regulatory and security clearances, sources said.
The Centre aims to announce the winning bidder by end-March 2026, though the final closure of the transaction could extend beyond the current financial year. Fairfax Financial, led by Prem Watsa, and Kotak Mahindra Bank are among the leading contenders for the asset, they said.
Under the proposed transaction, the government plans to divest a 30.48% stake in IDBI Bank, valued at around Rs 36,000 crore at current market prices. In addition, Life Insurance Corporation of India (LIC) will sell a 30.24% stake, taking the total stake on offer to 60.72%, with an estimated combined valuation of nearly Rs 72,000 crore.
The disinvestment process has been in motion since Jan. 7, 2023, when the Department of Investment and Public Asset Management (DIPAM) received multiple expressions of interest from potential bidders.
Notably Emirates NBD announced its intention to acquire up to a 60% stake in RBL Bank for around $3 billion (about Rs 27,000 crore). In light of this transaction, market observers say Emirates NBD is no longer viewed as a likely contender for IDBI Bank.
As far as disinvestment proceeds are concerned, the Centre has not set a separate target for disinvestment. Proceeds from stake sales are now accounted for under the broader category of "miscellaneous capital receipts." In the current fiscal, disinvestment proceeds have amounted to just Rs 8,768 crore.
With both the government and LIC exiting a controlling stake, the IDBI Bank transaction is expected to be among the largest banking-sector privatisations in India, though timelines remain contingent on regulatory clearances and bidder preparedness.
Also Read: IDBI Bank Q3 Results: Marginal Profit Growth Despite NII Decline
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