IDBI Bank Stake Sale: The process of privatizing IDBI Bank appears to be reaching its final stage. The Department of Investment and Public Asset Management (DIPAM) has asked shortlisted bidders to submit their final bids by February 5th. Sources familiar with the matter have told Moneycontrol.
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IDBI Bank Stake Sale: The IDBI Bank privatization process appears to be reaching its final stage. The Department of Investment and Public Asset Management (DIPAM) has asked shortlisted bidders to submit their final bids by February 5th. Sources familiar with the matter told Moneycontrol. The shortlisted bidders have been sent invitations and deadlines for final bids.
Kotak Mahindra Bank, Emirates NBD, and Fairfax India Holdings have been shortlisted for the IDBI Bank stake sale. Sources confirmed that DIPAM has sent these three companies a notification to submit their final bids by the third week of January.
Bid Price to be Set in Accordance with SEBI Regulations
IDBI Bank’s shares are listed on stock exchanges. Therefore, the final bid price will be determined in accordance with SEBI’s takeover regulations. Sources stated that the acquisition price in this process must be reflected in SEBI’s open offer and takeover norms. Questions sent to DIPAM, Kotak Mahindra Bank, Emirates NBD and Fairfax India Holdings in this regard remained unanswered till the time of writing this news.
How will the selection process proceed?
According to sources, after the financial bids are submitted, they will be opened in the presence of transaction advisors, members of the Inter-Ministerial Group (IMG), and authorized representatives of the bidding companies. The highest bid (H1) will then be identified. The source explained that evaluating the bids and identifying the highest bid (H1) is a straightforward process and does not take much time.
Once the H1 is selected, the proposal will be sent to the Inter-Ministerial Group (IMG) for recommendation, and then forwarded to the Finance Minister for approval. If all steps are completed on schedule, a clear winner for the IDBI Bank disinvestment could be identified by March 2026.
Payment and Transfer of Ownership
However, the final transfer of control of the bank to the successful bidder will depend on how quickly subsequent processes are completed and the winning bidder’s willingness to pay the full sale amount. According to the RFP (Request for Proposal), the successful bidder must pay the entire amount in cash. Furthermore, sources say that there may be an emphasis on maintaining IDBI Bank’s identity even after the disinvestment.
A government source stated that after receiving approval from the International Monetary Fund (IMF), the successful bidder’s name will be sent to the Cabinet for final approval.
The process has been ongoing since 2020
The proposal to disinvest IDBI Bank was first mooted in February 2020, when the Finance Minister presented the 2021 budget. Subsequently, a Request for Proposal (RFP) was issued in October 2022.
Meanwhile, the Reserve Bank of India approved four interested investors to bid under the “fit and proper” criteria. These included Kotak Mahindra Bank, Fairfax India Holdings, Emirates NBD, and Oaktree Capital. The closing due diligence process for IDBI Bank began in January 2025, and now, more than a year later, DIPAM has invited final bids.
Government and LIC to sell more than 60% stake
Under the disinvestment plan, the Government of India and Life Insurance Corporation of India (LIC) will jointly sell their majority stake in IDBI Bank. The government will divest 30.48 percent, and LIC 30.24 percent.
