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IDBI Bank Sale Hits Snag Over Bid Prices
7 Apr
Summary
- Two buyers' bids for IDBI Bank fell below the reserve price.
- Government seeks revised financial bids to avoid restarting the process.
- Fairfax and Emirates NBD are reportedly the potential buyers.
The strategic sale of IDBI Bank has encountered a significant hurdle as the financial bids submitted by the two potential buyers were lower than the reserve price established by the government. Sources indicate that the government may request revised financial bids to prevent a complete restart of the privatization process, which would cause further delays.
This development impacts the government's efforts to garner resources through disinvestment amid global economic uncertainties. The process, initiated in October 2022 with an Expression of Interest for selling a 60.72% stake, had advanced through technical evaluations, security clearances, and due diligence before financial bids were invited in January. Prem Watsa-led Fairfax and Emirates NBD are the reported bidders.
Currently, the government and LIC jointly own 94.71% of IDBI Bank, with plans to divest 60.72% of their combined stake. Despite receiving multiple preliminary bids and clearing them for security and 'Fit and Proper' assessments, the financial offers did not meet the reserve price, halting the sale's progression.
