Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla confirmed on Friday that financial bids have been received for IDBI Bank's strategic disinvestment, as reported by Upstox. The DIPAM secretary stated that "Financial bids have been received for the strategic disinvestment of the IDBI Bank. They will be evaluated as per the prescribed procedure," without disclosing further details about the bidders. This development comes after Kotak Mahindra Bank officially clarified on Saturday that it has not submitted a financial bid for IDBI Bank's majority stake, issuing a statement to the exchanges in compliance with Regulation 30(11) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The bank explained it had observed material movement in its share price on February 6 and issued the clarification in compliance with disclosure requirements under SEBI Listing Regulations.
Kotak Mahindra Bank and Fairfax Financial have submitted their financial bids for IDBI Bank's majority stake, marking a crucial milestone in the privatisation process. As reported by CNBC TV18, Indian-Canadian billionaire Prem Watsa's Fairfax is learnt to be among the bidders, signalling significant international interest in the strategic disinvestment. DIPAM confirmed receipt of the bids and announced they will now be taken up for evaluation as per the prescribed process, without disclosing the names of the bidders. The two contenders are in a race to acquire the 60.72% stake belonging to the government and Life Insurance Corporation of India (LIC). The Centre and LIC own over 90% of IDBI Bank, making this a significant divestment opportunity. The Reserve Bank of India approved Fairfax Financial Holdings, Emirates NBD, and Kotak Mahindra Bank as eligible bidders for 2024, as reported by The Economic Times. However, The Economic Times reports that Emirates NBD did not submit any bid, with all three entities having earlier submitted expressions of interest (EoIs).
Kotak Bank's statement that it is not in the race to acquire IDBI Bank would mean that the success of the government's plan to sell IDBI Bank will depend upon the interest of foreign bidders. As reported by The Times of India, Kotak Bank, while never an official contender, was long seen as a potential acquirer given the bank's high capital adequacy ratio, limited branch network and growth ambitions. On Saturday, the bank said it has not submitted a financial bid for IDBI Bank, denying media reports that named it among contenders in the government's divestment of the state-owned lender. Sources said that one of the reasons for the private lender not showing interest was the valuation. IDBI Bank's share price has risen 40% in the last 12 months whereas Kotak's shares are up only 8%, making the valuation less attractive for potential acquirers. In a stock exchange filing, Kotak Bank said it was responding to news reports, which suggested the bank would place a financial bid for IDBI Bank.
The privatisation of IDBI Bank represents the culmination of a six-year journey that began with the Union Budget announcement in February 2020. As reported by The Times of India, the plan to privatise IDBI Bank was first announced in the Union Budget presented in February 2020, marking the end of a long wait for stakeholders and investors. The successful bidder will be required to secure final approval from the Reserve Bank of India, which will assess the buyer under its fit and proper criteria. Additionally, approvals will be needed from statutory and regulatory authorities, including the Competition Commission of India. The successful bidder will also have to comply with the requirement to make an open offer to minority shareholders of IDBI Bank. This privatisation will mark the country's first privatisation of a former state-owned bank through a two-step route, involving a state insurer-led rescue that resulted in reclassification as a private sector bank, followed by the strategic sale process.
The Government of India and LIC are jointly selling a 60.72 per cent stake in IDBI Bank, with the government divesting 30.48% and LIC offloading 30.24%. As reported by The Times of India, the strategy involves selling a combined 60.7% stake of govt and LIC and is expected to fetch about ₹33,000 crore, with a winner likely to be announced by March-end 2026. The Centre plans to sell its 30.48% stake in IDBI Bank, currently valued at about ₹36,000 crore at prevailing market prices. State-run Life Insurance Corporation of India will simultaneously divest a 30.24% stake, taking the total shareholding on offer to 60.72%. The combined valuation of the stake sale is estimated at close to ₹72,000 crore. The transaction is expected to rank among the largest stake sales in India's banking sector and is seen as a landmark privatisation with both the government and LIC set to exit their controlling stakes.
The deadline for submitting financial bids was February 5, 2026, signaling the sale is nearing its final phase, according to The Times of India. Finance Secretary M. Nagaraju confirmed that financial bids for IDBI Bank are expected to open this month, marking a major step in the government's most closely watched strategic disinvestment in the banking sector. The government is targeting an announcement of the successful bidder by March 31, 2026, though the completion of the transaction could spill over into the next financial year due to regulatory approvals and procedural requirements. The Department of Investment and Public Asset Management (DIPAM) is managing the strategic stake sale, as confirmed by Business Standard. The final timeline will hinge on regulatory clearances, due diligence outcomes, and bidders' readiness to close the deal. The next stage in the strategic disinvestment process would involve fixing a 'Reserve Price' based on valuations by the Transaction Adviser (TA) and the Asset Valuer (AV), followed by opening the sealed financial bids in the presence of bidders.
At the time of reporting, IDBI Bank shares were up 7.16%, trading at ₹109.60 compared to the previous closing price of ₹102.28, as reported by ET Now. The positive market reaction reflects investor optimism about the disinvestment process reaching its final stages. Business Standard reports that the stock has climbed nearly 13% this February, boosted by the Union Budget's disinvestment target. However, employee unions have pushed to make the sale politically costly, requesting meetings with the Prime Minister and Finance Minister to urge the Centre to rethink selling to private or foreign buyers, as reported by LinkedIn. The privatisation process has been getting delayed for over the past three years, with the government and LIC having invited EoIs in October 2022 and received multiple EoIs in January 2023.
