India has received revised bids from Canada’s Fairfax Financial and Dubai’s Emirates NBD for the sale of its majority stake in IDBI Bank, two sources said, reviving a transaction stalled earlier this year over valuation expectations.
India’s federal government and state-run Life Insurance Corp of India are selling a combined 60.7% stake in IDBI Bank, with the transaction expected to be completed in a month, one of the sources said on Tuesday.
The sale process was stalled earlier this year after bids submitted in March by Fairfax and Emirates fell short of the government’s expectations.
The revised bids are being evaluated, and a top panel of bureaucrats met on Monday to discuss the stake sale, a third source said. The Indian government owns 45.48% of IDBI Bank, while LIC holds 49.24%.
Fairfax is the frontrunner to acquire the bank and is in conversation with the government while Emirates is not actively pursuing the deal after having acquired another Indian lender last year, one of the two sources and a fourth source said.
Details of the revised bids and valuation of the bank could not be immediately ascertained. Shares of IDBI Bank were trading nearly 4% higher at 87 rupees around noon, giving the lender a market capitalisation of 938.68 billion rupees ($9.77 billion).
The finance ministry, IDBI, LIC, Fairfax and Emirates did not immediately respond to requests for comment from Reuters. The sources spoke on condition of anonymity to discuss sensitive matters.
The revised bids come amid growing foreign investor interest in India’s financial sector.
Last year, Emirates NBD acquired a stake in private lender RBL Bank for $3 billion, while Japan’s MUFG bought a 20% stake in non-bank lender Shriram Finance for $4.4 billion, marking some of the largest foreign investments in India’s banking industry.
To draw similar interest in state-run banks, India also plans to raise the foreign direct investment limit in them to 49% from 20% presently.
REVIVED SALE PROCESS
IDBI Bank’s stake sale process was initiated in 2022 and has since dragged on due to regulatory and procedural approvals.
By March 2026, when the process neared its completion, it stalled due to high government valuation expectations and weak investor appetite amid the Middle East conflict.
Concerns over pension and gratuity liabilities also weighed on bids, Reuters had reported.
Source: Reuters.com