Fresh momentum is building around the long pending privatisation of IDBI Bank, with new reports indicating that Kotak Mahindra Bank has emerged as a leading contender in the stake sale. The Centre has earlier stated that it aims to complete the privatisation by the end of the 2026 fiscal year.
According to a report from a financial news platform, Kotak Mahindra Bank has joined Oaktree Capital and Fairfax in expressing interest in acquiring a stake in IDBI Bank. However, Kotak Mahindra Bank has not officially confirmed this development. The report notes that the primary concern for interested bidders is the bank’s large market capitalization.
With IDBI Bank valued at around one lakh crore rupees, acquiring a sixty percent stake would be challenging for potential investors. The report adds that Kotak Mahindra Bank could explore a mix of equity and cash in a possible merger structure, enabling a more flexible approach to the acquisition.
Currently, the Centre holds 45.48 percent in IDBI Bank while the Life Insurance Corporation of India owns 49.24 percent. The Department of Investment and Public Asset Management is managing the sale of a sixty one percent stake. Officials have indicated that India has completed due diligence for the stake sale and plans to invite financial bids between October and December. The privatisation process was first announced in 2022.
LIC previously served as a promoter shareholder after taking control of the bank in 2019, which gave it board representation and strategic influence. Its reclassification now positions it as a financial investor without promoter rights.
IDBI Bank shares closed at 100.25 rupees on the BSE in Friday’s trading session, down 2.60 rupees or 2.53 percent.
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