The Indian government is close to finalising a strategic sale of a 60.72 per cent stake in IDBI Bank, with Fairfax Financial Holdings and Emirates NBD submitting new bids after initial offers fell short, signalling renewed confidence and progress in India’s banking privatisation efforts.
The Indian government is reviewing revised financial bids from Fairfax Financial Holdings and Emirates NBD for a 60.72 per cent stake in IDBI Bank, with sources describing the strategic sale as moving ahead at a steady pace. The process had been revived after earlier offers fell short of the reserve price set by the disinvestment panel, prompting a fresh round of bidding this year.
According to people familiar with the matter, the two suitors submitted updated offers in July after the sale was put on hold when their earlier bids came in below the government’s floor price. Business Standard reported that a final decision on the winning bidder is expected soon, while Mint said the renewed process had regained momentum after the earlier setback.
Both bidders already have a presence in Indian banking. Fairfax Financial, backed by investor Prem Watsa, holds a stake in CSB Bank, while Dubai-based Emirates NBD acquired a majority interest in RBL Bank earlier this year, according to the article’s background and related reports. The bidders have also cleared security screening by the home ministry and the Reserve Bank of India’s “fit and proper” assessment, removing two major regulatory hurdles.
The stake being sold is significant. The government and Life Insurance Corporation together own 94.71 per cent of IDBI Bank, with the Centre holding 45.48 per cent and LIC 49.24 per cent. Of that combined holding, they plan to sell 60.72 per cent, split between 30.48 per cent from the government and 30.24 per cent from LIC. The strategic sale, first floated in October 2022, is being watched closely because it would mark one of the most prominent banking privatisations in India in recent years.
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