Government to Sell IDBI Bank this year, Know top 3 bidders who can purchase this Bank

The government is planning to sell its stake in IDBI Bank by the end of this year, with financial bids expected soon. This raises an important question: who will buy IDBI Bank? In this article, we introduce the top three front runners likely to purchase IDBI Bank.

A major question in the financial sector is who will control IDBI Bank once it is privatized. The government’s plan to sell this bank has become clearer, with three main buyers emerging as serious contenders. These buyers have all received “fit and proper” certificates from the Reserve Bank of India (RBI). The leading contenders are:

1. Fairfax Financial, led by Indian-origin Canadian banker Prem Watsa
2. Emirates NBD
3. Kotak Mahindra Bank

Currently, Fairfax Financial seems to be in the lead.

IDBI Bank, originally a financial institution, became a bank and has been a target for privatization for some time. The government holds a 45.5% stake, while the Life Insurance Corporation (LIC) owns over 49%. The government plans to divest a 60.7% stake in the bank—30.5% from the government and 30.2% from LIC. This stake is valued at approximately Rs 1,08,814.31 crore. The privatization process is expected to go smoothly since IDBI is already considered a private entity. The government’s increased stake came from capital injections needed to cover significant debt-related losses.

Recently, Tuhin Kant Pandey, Secretary of the Department of Investment and Public Asset Management (DIPAM), confirmed that the strategic sale of IDBI Bank is on track to be completed within this fiscal year. The RBI is currently assessing the shortlisted bidders to ensure they are fit and proper. Once approved, these bidders will gain access to a virtual data room containing exclusive IDBI Bank information for due diligence.

As the financial year draws to a close, the strategic sale of IDBI Bank is expected to conclude, marking a significant change in India’s banking sector. The suspense continues as stakeholders and the public await the final decision on who will shape the future of IDBI Bank.