IDBI Bank sale: Timing of Fairfax deal announcement being worked out, say government sources 

The proposed strategic sale of a 60.72% stake in IDBI Bank is moving towards its final stage, with the timing of the announcement being worked out as the government weighs Fairfax Financial Holdings’ revised offer and its valuation of the lender, sources said.

The government is understood to be examining whether Fairfax’s revised offer adequately reflects its valuation expectations for the lender, following the bidding process that was revived after the initial financial offers fell below the reserve price earlier this year.

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The valuation remains a key consideration as the government works towards a final decision. However, the strategic sale process remains underway, with Fairfax continuing to be the front-runner for the transaction, sources said.

The sale process had hit a hurdle earlier this year after the initial financial bids submitted by Fairfax and Dubai-based Emirates NBD were understood to have fallen below the government’s reserve price. The two bidders were subsequently allowed to submit revised offers, with Fairfax understood to have sweetened its bid.

The valuation question assumes significance given that the reserve price was known to bidders when they participated in the process. The subsequent interest in the transaction, despite the earlier hurdle, could also be a factor in the government’s assessment of the revised offer.

The government and Life Insurance Corporation of India (LIC) are together selling 60.72% in IDBI Bank, with the government divesting 30.48% and LIC 30.24%. The revised offer is understood to be around ₹81 a share, implying a valuation of roughly ₹53,000 crore for the 60.72% stake being divested by the government and LIC.

The transaction, initiated in 2021, has faced multiple delays, including regulatory and procedural hurdles. However, the renewed bidding process and continued interest from strategic investors indicate that the disinvestment exercise remains substantially on track, with valuation and the timing of the final announcement being the key considerations at this stage.