The Centre is close to accepting a revised financial offer from Canada’s Fairfax Financial Holdings for acquiring a controlling stake in IDBI Bank, bringing one of India’s longest-running bank privatisation plans closer to completion.
People familiar with the discussions said Fairfax has marginally increased its per-share offer after its earlier bid fell short of the government’s undisclosed reserve price. The improved proposal has emerged as the frontrunner in the bidding process and is now under active consideration.
The government and Life Insurance Corporation of India (LIC) together are selling a 60.7 per cent stake in IDBI Bank as part of the strategic disinvestment programme launched in 2022. While the Centre owns 45.48 per cent of the lender, LIC holds 49.24 per cent. The transaction would mark the largest government-backed sale of a majority stake in an Indian bank in recent years.
Apart from Fairfax, Dubai-based Emirates NBD has also submitted a revised bid. Government sources said a high-level panel has already reviewed the fresh offers, with the evaluation process now in its final stages. Officials expect the stake sale to be completed within the next month, subject to approvals from the Union Cabinet and the Reserve Bank of India.
The privatisation exercise had briefly stalled earlier this year after the initial financial bids failed to meet the government’s valuation expectations. Rather than abandoning the process, authorities invited revised offers, prompting Fairfax to improve its bid. The Canadian insurer had also infused capital into India ahead of the potential acquisition, signalling its continued interest in the deal.
For the government, successfully concluding the IDBI Bank sale would represent a significant milestone in its disinvestment agenda after several years of delays. For Fairfax, founded by Indian-born billionaire Prem Watsa, the acquisition would provide a major foothold in India’s fast-growing banking sector and potentially become one of the country’s largest foreign investments in banking. Investors welcomed the latest developments, with IDBI Bank shares gaining more than three per cent in Tuesday’s trade following reports of progress in the sale process.