IDBI Bank Strategic Sale Stalls Due to Low Bids

The strategic sale of IDBI Bank has hit a roadblock as financial bids were lower than the reserve price. The government and LIC were planning to sell a 60.72% stake in the bank, but bids from Fairfax and Emirates NBD fell short, despite receiving initial security clearance.

The strategic sale of IDBI Bank has likely been shelved after financial bids from potential buyers fell below the reserve price, sources revealed on Friday.

The government and the Life Insurance Corporation (LIC) were aiming to divest 60.72% of their stakes in IDBI Bank, having issued an Expression of Interest (EoI) in October 2022. However, the financial bids submitted by February 6 were found inadequate by an inter-ministerial group on disinvestment, chaired by finance ministry secretaries.

Among the bidders, Prem Watsa-led Fairfax and Emirates NBD are reported to have made offers which did not meet the required valuation. Combined, the government and LIC hold 94.71% of IDBI Bank, and the sale process entailed a 30.48% and 30.24% reduction in their stakes, respectively. Despite prior security and suitability clearances, the sale attracted bids that were eventually deemed unsatisfactory.

(With inputs from agencies.)