IDBI Bank bidders have a post-Budget deadline

NEW DELHI/MUMBAI: The Centre has set a post-Budget deadline to receive bids for offloading stake in IDBI Bank, said people in the know. The move marks the final phase of the divestment exercise formally launched in October 2022.

Bids can be submitted till the first week of February, the people said. The Union budget for FY27 will be presented on February 1.

The Government of India and Life Insurance Corporation of India are together selling 60.72% stake in IDBI Bank. They collectively own more than 90% of the lender.


The bid submission deadline was initially slated for the last week of December, but was later extended.

Toronto-headquartered Fairfax Financial and Kotak Mahindra Bank are the two contenders for IDBI Bank. ET reported on December 12 that Fairfax is a frontrunner in the bidding process.

The bid document states that bidders must submit an unconditional offer, and any attached conditions will render the offer invalid. It also specifies that bidders won't have the right to make changes to the share purchase agreement once it is submitted to the Department of Investment and Public Asset Management (Dipam), the people said.

Further, the document notes that the government will retain the right to veto any bid. Such rejections are expected to be rare since the Reserve Bank of India granted in-principle approval to all the potential applicants a year ago. Any rejection, however, will be made in consultation with the regulator.

The Centre has done the preparatory work for setting up the reserve price, and as per the transaction mandate, it will be arrived at before opening the financial bids. The reserve price will be confidential and won't be disclosed to the bidders, the people said.

However, a key concern emerging is the possibility of Dipam getting only a single bid for IDBI Bank, which could raise questions of true price discovery for the stake, some people said.

However, another person close to the bidding process dismissed this possibility.

The successful bidder will have to go through a final review by the RBI to clear the 'Fit & Proper' assessment. The bidder will also need approvals from statutory and regulatory authorities including the Competition Commission of India.

The sale process has been mired in delays due to several procedural aspects that were addressed as the process unfolded.

The government and LIC have sought approvals for cancelling their status as promoters of IDBI Bank to facilitate a smooth divestment process. Relaxation was also sought from the Securities and Exchange Board of India to exempt the bank from following minimum public shareholding norms which mandate listed companies to have at least 25% free float.