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IDBI Bank Sale: Two Bids In, One Suitor Out
7 Feb
Summary
- Fairfax Financial and Emirates NBD submitted financial bids for IDBI Bank.
- Kotak Mahindra Bank clarified it did not submit a bid.
- Government and LIC are selling a combined 60.7% stake.
Two firms, Fairfax Financial and Emirates NBD, have formally submitted financial bids for the government's strategic divestment of IDBI Bank. The Department of Investment and Public Asset Management (DIPAM) has confirmed the receipt of these bids and will proceed with their evaluation according to the established procedures. Kotak Mahindra Bank, which was previously mentioned as a potential suitor, has officially stated that it has not submitted a bid and is not participating in the current divestment process.
The Reserve Bank of India had previously issued 'fit and proper' certificates to the shortlisted bidders, enabling them to move forward and submit binding financial offers. This clearance was a crucial step, allowing access to the bank's data room. The government aims to sell a combined 60.7% stake in IDBI Bank, comprising 30.48% from the Government of India and 30.24% from the Life Insurance Corporation of India (LIC). Following the divestment, the government will retain a 15% stake, and LIC will hold 19%.
Sources indicate that the government reserves the right to reject any bid, in consultation with the RBI. Bids must be unconditional, as any conditional offers will be considered invalid. Furthermore, bidders are prohibited from requesting changes to the share purchase agreement post-submission. In a potential future development, if Fairfax emerges as the winning bidder, it might explore a merger between CSB Bank and IDBI Bank, subject to regulatory approvals.
