Canadian investment group Fairfax Financial and Emirates NBD have bid for acquiring majority stake in IDBI Bank, sources said.

The government has admitted that it has received bids but did not disclose names of the bidders. 

On Friday, Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla said financial bids have been received for the strategic disinvestment of IDBI Bank but did not reveal further details. 

An evaluation of the bids will be carried out as per the prescribed procedure, Chawla said in a post on X.  

The government and state-owned Life Insurance Corporation of India (LIC) together plan to sell 60.72% stake in IDBI Bank. While the government owns 45.48%, insurance behemoth LIC holds 49.24% after rescuing the bank in 2019 when it was hit by a spike in bad loans.

For Fairfax, the plan could be to merge CSB Bank with IDBI Bank, which has a larger national footprint. CSB Bank has a stronger presence in Kerala and has been trying to spread out for a wider pan India presence. Fairfax holds a majority stake in CSB Bank, formerly known as Catholic Syrian Bank.

Emirates NBD is looking to fortify its presence in India, after agreeing last year to invest Rs 26,850 crore for acquiring majority stake in private lender RBL Bank. IDBI Bank is a much larger-sized bank than RBL.

Kotak Mahindra Bank's name as a bidder has been speculated but it is not clear if the private lender would let go its conservative business model.

The government intends to announce the buyer of the IDBI stake in the current financial year ended 31 March 2026.

As part of the privatisation programme, the government had announced the intent to sale IDBI Bank first in 2022. Along with LIC, the government in October 2022 invited expression of intent (EoI) for a sale which included 30.48% shares of the government and 30.24% of LIC.

The next stage will be to fix a reserve price, based on valuations by the Transaction Adviser (TA) and the Asset Valuer (AV), who will use respective methodologies as per the established process.

After this, the bids will be opened in the presence of the bidders. The highest among all the valid bidders will be declared the winner.

Besides banking operations, IDBI Bank has immovable assets such as land and buildings which account for around 3% of its total assets.

The successful bidder will need to get final approval from the RBI under its ‘fit and proper’ criteria, besides other regulatory clearances.