IDBI Bank stake sale nears final stage as govt weighs revised Fairfax offer

The proposed strategic sale of a 60.72 per cent stake in IDBI Bank is approaching its final stage, with the government assessing Fairfax Financial Holdings’ revised offer and working out the timing of the announcement, according to sources.

Fairfax remains the frontrunner for the transaction, but the government is examining whether its latest bid adequately reflects the expected valuation of the lender. The revised offer is understood to be around Rs 81 per share, valuing the stake being divested at approximately Rs 53,000 crore.

The government and Life Insurance Corporation of India jointly hold the stake being offered for sale. The Centre plans to divest 30.48 per cent, while LIC will sell 30.24 per cent.

The privatisation process encountered a setback earlier this year after the initial financial offers submitted by Fairfax and Dubai-based Emirates NBD reportedly fell below the reserve price. Both bidders were subsequently allowed to revise their proposals, with Fairfax understood to have improved its offer.

The valuation remains central to the government’s deliberations, particularly as bidders were aware of the reserve price when they entered the process. Continued investor interest in the transaction despite the earlier impasse could also influence the assessment of the revised bid.

Uncertainty surrounding the disinvestment weighed heavily on IDBI Bank’s shares on Tuesday. The stock fell 10.5 per cent to close at Rs 81.22 on the National Stock Exchange after touching an intraday low of Rs 79.05.

Trading activity rose sharply, with 690.74 lakh shares worth Rs 571.93 crore changing hands during the session.

The strategic sale, initiated in 2021, has faced several delays due to regulatory and procedural issues. However, the revival of the bidding process and the continued participation of strategic investors suggest that the transaction remains on course, with the valuation and timing of the final announcement now emerging as the principal considerations.

With agency inputs