Fairfax Front-Runner in IDBI Bank Majority Stake Sale, Kotak Also Competing

As per The Economic Times report, Fairfax Financial is leading the race to acquire a majority stake in IDBI Bank, as the government and Life Insurance Corporation (LIC) move closer to finalising the sale.  

The Toronto-based company is competing with Kotak Mahindra Bank for a 60.72% stake in the bank, valued at nearly $7 billion. 

Fairfax and Kotak Mahindra Bank in Final Bidding Stage 

Only 2 serious contenders, Fairfax Financial and Kotak Mahindra Bank, remain in the fray after being shortlisted from an earlier round.  

Fairfax, led by Indian-Canadian investor Prem Watsa, is reportedly preparing an all-cash bid that aligns closely with IDBI Bank’s current valuation. Meanwhile, Kotak Mahindra Bank is considering a mix of cash and shares for its offer. 

Government and LIC’s Stake Sale 

The government and LIC are jointly selling a 60.72% stake in IDBI Bank. This move is part of a long-running plan to exit the bank, with the stake valued at approximately $7 billion at current market prices.  

IDBI Bank’s stock has seen a significant rise, with its market capitalisation reaching around ₹1,02,000 crore. 

Read More: Government's Q4 PSU Stake Sale List FY27 Revealed: IDBI Bank, LIC, and Others! 

Regulatory Approvals and Reserve Price 

Both Fairfax and Kotak Mahindra Bank have received clearance from the Reserve Bank of India, ensuring they meet the “fit and proper” criteria for placing financial bids.  

The next step involves setting a reserve price for the sale, which will be determined after receiving bids but before they are opened. This reserve price will remain confidential. 

Conclusion 

Fairfax Financial appears to be leading the race to acquire a majority stake in IDBI Bank, with Kotak Mahindra Bank still in contention. The government and LIC’s plan to divest their stake is progressing, with regulatory approvals in place and the reserve price yet to be set. 

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