India evaluates revised Fairfax, Emirates NBD bids for IDBI Bank
India's government is reviewing revised bids from Fairfax Financial and Emirates NBD for a majority stake in IDBI Bank, pushing the lender's shares up 4% as the long-delayed privatisation nears completion.
India has received revised financial bids from Canada’s Fairfax Financial and Dubai-based Emirates NBD for a 60.7% stake in IDBI Bank, advancing a privatisation effort initially launched in 2022. A high-level panel of bureaucrats met on Monday to evaluate the new offers, with the divestment process now expected to conclude within the next month.
The stock rallied as much as 4% on Tuesday, touching an intraday high of ₹87.63 on the National Stock Exchange. Shares opened at ₹85, up from Monday's close of ₹84.07. The immediate gains build on a recent upswing that has seen the lender climb 3.35% over the past week and 14.27% over the past month.
However, the broader trajectory highlights the uncertainty that has recently weighed on the stock. Year-to-date, IDBI Bank shares are down 17%, and they have lost 14% over the past 12 months. This short-term volatility contrasts sharply with the bank's longer-term performance, which includes a 51% return over three years and a 128% gain over five years.
Deal structure
The Indian government and state-owned Life Insurance Corporation of India (LIC) are jointly selling the majority stake. The state currently holds 45.48% of IDBI Bank, while LIC owns 49.24%. Neither the finance ministry, IDBI Bank, LIC, nor the two bidders responded to requests for immediate comment.
The current round of bidding represents a crucial turning point for the transaction. The government was forced to restart the process this month after initial bids submitted in March fell short of its minimum valuation expectations. According to Bloomberg News, Fairfax has emerged as the frontrunner to acquire the lender.
For market participants, the progression of the sale removes a significant overhang that has suppressed the bank's valuation despite its historical share price resilience. The entry of a foreign majority owner would conclude a complex, multi-year divestment that investors have closely monitored as a bellwether for India's broader asset privatisation agenda.
