The government is examining whether Fairfax’s revised offer adequately meets its valuation expectations for IDBI Bank, following the bidding process that was revived after the initial financial offers fell below the reserve price earlier this year. Valuation remains a key consideration as the government moves towards a final decision.
The strategic sale process remains underway, with Fairfax continuing to be the front-runner for the transaction, sources said.
The sale process faced 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 issue assumes significance because 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. 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 now the key considerations.
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