India weighs revised IDBI Bank bids from Emirates NBD, Fairfax
India's top disinvestment panel has reviewed revised bids for a 60.72% stake in IDBI Bank, advancing a deal poised to be the country's largest banking sector privatisation and a critical source of FY27 capital receipts.
A senior government panel met on Monday to evaluate revised financial bids for IDBI Bank. The offers came from Emirates NBD and Fairfax Financial Holdings, advancing a long-delayed privatisation process.
The Centre and Life Insurance Corporation (LIC) are seeking to divest a combined 60.72% stake in the lender, alongside the transfer of management control. The government holds 30.48% of IDBI Bank, while LIC owns 30.24%. Together, the two state-backed entities control nearly 95% of the bank.
A successful transaction would represent the largest strategic disinvestment in India's banking sector. The sheer scale of the shareholding being offloaded makes it a landmark deal for New Delhi's broader privatisation agenda.
The current sale process originated in October 2022 when the government and LIC invited initial expressions of interest. Shortlisted bidders, including the Prem Watsa-controlled Fairfax Financial and Emirates NBD, submitted their first financial bids on February 6. However, those offers fell below a reserve price fixed by an inter-ministerial group, stalling the transaction.
Officials revived the effort in the current financial year, requesting revised offers from the two remaining suitors earlier this month. The Core Group of Secretaries on Disinvestment convened twice on Monday to deliberate on the updated submissions. An Inter-Ministerial Group, co-chaired by Department of Investment and Public Asset Management Secretary Arunish Chawla and Department of Financial Services Secretary Sanjay Lohiya, also reviewed the transaction.
Despite the renewed activity, a final decision remains pending. "It is too early to say which bidder is ahead in the race. The timeline for completing the transaction also cannot be determined at this stage," a senior government official said.
The IDBI Bank stake sale is a critical component of New Delhi's fiscal strategy. The Union Budget for the 2026-27 fiscal year targets ₹80,000 in mobilisation from disinvestment and asset monetisation. Hitting that target depends heavily on the execution of flagship deals like IDBI.
The sale is also unfolding against a changed policy backdrop. Starting with the Interim Budget for FY25 presented on February 1, 2024, the government stopped announcing standalone disinvestment targets. Receipts from asset sales have since been merged into the broader category of Miscellaneous Capital Receipts, reflecting a strategic shift in how the Centre approaches the monetisation of public sector assets.
