Discussions with potential candidates are at an advanced stage, according to people familiar with the matter. A government agency is expected to formally open the bidding process this month, in what could be the largest state-backed sale of a bank stake in decades, they said, asking not to be identified discussing confidential information.
India aims to sell 60.72 percent of the Mumbai-based lender, which amounts to about $7.1 billion at IDBI Bank’s current market price.
The bank, once burdened by heavy bad loans, has emerged from a major cleanup and returned to profitability in recent years after capital support and aggressive recovery measures helped it sharply reduce non-performing assets.
The government missed earlier deadlines to complete the sale due to hurdles such as delays in obtaining regulatory approvals.
Government officials have repeatedly indicated that the disinvestment process will be completed in the fiscal year ending March 2026. Shortlisted bidders are currently conducting due diligence, the finance minister said this week in a written response to parliamentary questions.
Kotak Mahindra Bank Ltd., Emirates NBD PJSC and Fairfax Financial Holdings Ltd. had shown so-called expressions of interest for IDBI Bank and received an eligibility criterion from the country’s central bank, the people said. An expression of interest is the first step in the bidding process, but may not result in a financial bid.
The federal government and state-owned Life Insurance Corp of India together own about 95 percent of the lender. The government will sell 30.48 percent of its stake in the bank, while LIC will divest 30.24 percent along with transfer of management control.
Spokespeople for India’s finance ministry, LIC, IDBI Bank, Kotak and Fairfax did not respond to requests for comment. A spokesperson for Emirates NBD declined to comment.
Which banks are competing for a bid?
Kotak, backed by Asia’s richest banker Uday Kotak, is seen as the frontrunner to make a bid for IDBI Bank, the people said. Still, the lender has indicated in talks that it will not pursue the deal at a high price, they said.
A merger and acquisition could exceed Kotak’s size, Jefferies said in a note late last month. But if the government seeks cash for the deal, it could hit Kotak’s capitalization and the merged bank’s profits, the report said.
Canadian billionaire Prem Watsa’s Fairfax, an active investor in India including in companies such as CSB Bank Ltd., remains in the fray, the people said. Emirates NBD, one of the Middle East’s largest lenders that recently announced a jumbo deal to acquire a majority stake in RBL Bank Ltd. to buy has also considered participating, they said.
Shares of IDBI Bank are up nearly 30 percent so far this year, resulting in a market value of over 1 trillion rupees ($11.6 billion).
While the winning bidder is expected to be announced by the end of March next year, the deal is expected to continue beyond that date as approvals and other approvals come into play, the people said.
More stories like this are available at bloomberg.com
Published on December 5, 2025
#India #bid #billion #stake #IDBI #Bank #month