The government of India is likely to scrap the bidding process for the sale of a majority stake in IDBI Bank after the offers received were reportedly below the government’s minimum price expectations, according to a Bloomberg report citing people familiar with the matter.
The move would effectively bring the long-running privatization attempt to a halt, the report said, with officials declining to disclose the size of the bids or the reserve price set by the government.
The government and state-run insurer Life Insurance Corporation of India (LIC) had planned to sell a 61% stake in IDBI Bank.
Sources cited by the news outlet declined to reveal the identities of the bidders or the exact amounts offered.
Foreign investors had shown interest
Earlier reports had suggested that Canada-based Fairfax Financial Holdings had emerged as a frontrunner in the race to acquire the bank.
Dubai-based Emirates NBD was also reported to have submitted a bid for the lender.
If completed, the deal would have represented the largest foreign investment in India’s banking sector.
Stake valued at about $6.5 Billion
At current market prices, the combined 61% stake held by the government and LIC in IDBI Bank is valued at around $6.5 billion.
The planned divestment has been part of the government’s broader strategy to reduce state ownership in the banking sector and attract private capital into public sector banks.
The government has been trying to privatize the Mumbai-based lender for several years as part of its broader disinvestment programme.
This is a developing story. Please check back for updates
