IDBI Bank has gained significant momentum, with Canada’s Fairfax Financial Holdings and Dubai’s Emirates NBD submitting revised financial bids for a majority stake in the lender. The strategic disinvestment process—jointly managed by the federal government and the state-run Life Insurance Corporation of India (LIC)—involves selling a combined 60.7% stake in the Mumbai-based bank, with the Centre paring 30.48% and LIC divesting 30.24%. The transaction, which could potentially mark the largest foreign investment in India’s banking sector at an estimated value of $5.7 billion, is expected to wrap up within a month. A top panel of inter-ministerial bureaucrats met to evaluate the updated offers, which successfully revived the deal after initial bids submitted earlier this year were temporarily stalled for falling below the government’s confidential reserve price.
Billionaire investor Prem Watsa’s Fairfax Financial has emerged as the clear frontrunner in active negotiations with the government, reportedly considering a sweetened offer a few rupees higher per share than its previous baseline. To comply with the Reserve Bank of India’s (RBI) strict regulatory norms against holding two banking licenses, Fairfax has committed to fully divesting its existing 40% stake in CSB Bank upon securing IDBI. Conversely, sources indicate that Emirates NBD is not aggressively pursuing the transaction, having already expanded its footprint in the country by acquiring a majority stake in mid-sized private lender RBL Bank. Both remaining suitors hold the necessary security clearances from the Ministry of Home Affairs and “fit and proper” approvals from the RBI. Fueled by the breakthrough, IDBI Bank’s share price surged up to 5% in intraday trading on Tuesday to hit ₹88.40 on the BSE, breathing fresh optimism into the bank’s post-cleanup return to profitability.
