India Halts IDBI Bank Privatization on Low Bids

The Indian government's plan to privatize a majority stake in IDBI Bank has been halted after financial bids from potential buyers fell short of the reserve price, sources familiar with the matter said. The development, reported on March 13, triggered a sharp 15 percent drop in the bank's shares on Monday, closing at 78.42 rupees on the National Stock Exchange and nearing a 52-week low.

The government and Life Insurance Corporation of India, which together hold a 94.72 percent stake in the Mumbai-based lender, had sought to divest a combined 60.72 percent equity along with management control. The government owns 45.48 percent, while LIC controls 49.24 percent. The stake, valued at around 6.5 billion dollars based on current market prices, was intended to reduce state ownership in the banking sector and attract private investment.

The privatization effort received in-principle approval from the Cabinet Committee on Economic Affairs in May 2021. An expression of interest was issued in October 2022, followed by preliminary bids in January 2023. Shortlisted bidders, including Canada's Fairfax Financial Holdings and Dubai-based Emirates NBD, completed due diligence and security...