IDBI Bank Disinvestment Enters Final Stage as Kotak, Emirates NBD, Fairfax Submit Bids

The disinvestment of IDBI Bank (IDBI Bank Disinvestment Update) is likely to happen soon. Financial bids have been submitted by Kotak Mahindra Bank, Emirates NBD, and Fairfax India Holdings for the disinvestment of IDBI Bank, which is a strategic disinvestment. Emirates NBD is a Dubai-based government company, and Fairfax India is owned by Canadian billionaire Prem Watsa, who is Indian by origin. The financial bids of the shortlisted companies will now be evaluated, and the selection will not be purely based on price; rather, it will depend on various qualitative factors as well.

Previously, it was confirmed by the Department of Investment and Public Asset Management (DIPAM) that it received financial bids. On February 6, it was announced by the Secretary of DIPAM through social media that financial bids were received for the strategic disinvestment of IDBI Bank. These will be evaluated as per the established process. After receiving final financial offers from shortlisted bidders, the transaction enters its final evaluation phase.

This strategic sale involves the transfer of a majority stake in the bank as well as management control. 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 held by LIC. This disinvestment is part of the central government's larger strategic disinvestment program, which aims to increase non-tax revenues and reduce its presence in non-core sectors.

IDBI Bank's privatization process gained momentum in March 2021, when the bank exited the Reserve Bank of India's Prompt Corrective Action Framework following improvements in asset quality, capital adequacy, and profitability. Exiting PCA was a necessary condition to attract private investors and revive interest in a strategic sale.