Fairfax Leads Race for IDBI Bank Stake Sale: December-End Bid Deadline Near as Kotak Stays in the Fray

New Delhi | December 12, 2025 — India’s long-delayed IDBI Bank stake sale has entered a decisive stretch, with Fairfax Financial emerging as the leading contender to acquire a controlling stake from the Government of India and Life Insurance Corporation of India (LIC), according to people familiar with the process. The race has effectively narrowed to two serious bidders—Fairfax and Kotak Mahindra Bank—as the deadline for financial bids approaches at the end of December, with some indications the timeline could spill into early January. ^[1]

The stakes are high: the Centre and LIC are jointly looking to divest 60.72% of IDBI Bank, a block valued at nearly $7 billion at current market levels, in what could become one of India’s most consequential ownership shifts in the banking sector in years. ^[2]

Markets react: IDBI Bank shares jump as bidders narrow

Investors responded quickly to the latest developments. On Friday, December 12, IDBI Bank shares rose 3.6% intraday to ₹98.60 on the BSE, after reports highlighted Fairfax and Kotak as the key contenders and reiterated expectations that financial bids are due by December-end. ^[3]

With the stock having tripled since the government first announced its intent to divest around three years ago, the latest rally underscores how strongly markets are pricing in a near-term outcome—either a strategic sale at a premium, a clear timeline on valuation, or both. ^[4]

What’s being sold—and why this deal matters

At the center of the story is a straightforward but massive transaction:

Seller(s): Government of India and LIC
Asset:IDBI Bank
Stake on offer:60.72%, with management control
Approximate value of stake:~$7 billion (based on prevailing market prices) ^[5]

As of Thursday’s close cited in market coverage, IDBI Bank was trading around ₹95 per share, giving it a market capitalization of roughly ₹1.02 lakh crore. ^[6]

For India’s broader disinvestment strategy, this is more than a routine divestment. A successful sale would mark a major milestone in the government’s multi-year effort to reduce ownership in select financial institutions and bring in strategic operators with the capacity to invest, expand, and compete more aggressively.

Why Fairfax is seen as the frontrunner

Multiple reports on December 12 place Toronto-based Fairfax Financial—founded by Prem Watsa—in pole position, largely because its bid strategy appears built for clarity and speed.

1) A likely all-cash offer at or near market valuation

Sources cited in the latest coverage suggest Fairfax is leaning toward a full cash bid aligned with IDBI’s prevailing valuation, a structure that can reduce complexity at a moment when the process is entering its final gates. ^[7]

2) RBI “fit and proper” clearance already in place

Any buyer seeking control of an Indian bank must clear the Reserve Bank of India’s scrutiny. Reports indicate Fairfax and Kotak have been cleared under the RBI’s “fit and proper” framework, which is a prerequisite for submitting binding financial bids. ^[8]

3) Existing Indian banking footprint via CSB Bank

Fairfax already holds a controlling stake in CSB Bank, acquired in 2018 after regulatory approval—an operating credential that matters when regulators and policymakers weigh the credibility of a new controlling shareholder. ^[9]

Taken together—cash simplicity, regulatory readiness, and an established Indian banking presence—Fairfax currently looks positioned to move fastest if the process runs on schedule.

Kotak Mahindra Bank: still a serious challenger, but weighing structure

While Fairfax may be ahead, Kotak Mahindra Bank remains firmly in contention and is widely seen as the only other bidder capable of mounting a competitive, compliant bid at this scale.

Unlike Fairfax’s reported preference for an all-cash proposal, Kotak is said to be evaluating an offer that combines cash and shares—a structure that can be useful when the target’s valuation is large, but which also tends to introduce more variables (pricing mechanics, shareholder implications, approvals, and timelines). ^[10]

Importantly, sources cited in the coverage suggest the submission of bids could slip into early January, hinting at either final-stage negotiations, documentation, or bidder readiness—common in transactions where valuation, governance, and post-acquisition requirements are heavily regulated. ^[11]

Where is Emirates NBD now—and why it matters

Earlier in the process, Emirates NBD was among names associated with interest in the IDBI Bank stake sale. But the latest December 12 reporting suggests the Dubai-based bank is reassessing whether to stay in the final round, following its recently concluded agreement to acquire a controlling stake in RBL Bank. ^[12]

That RBL development is significant: Reuters reported in October that Emirates NBD agreed to buy a 60% stake in RBL Bank for $3 billion (subject to approvals), a transaction widely described as a landmark cross-border move in India’s financial sector. ^[13]

If Emirates NBD prioritizes executing and integrating the RBL deal, that could help explain why the IDBI contest now appears to have consolidated around Fairfax and Kotak.

How the stake sale process works from here

This isn’t a typical M&A auction. Because the asset is a bank and the seller includes the state and a major state-owned insurer, the process has multiple moving parts—some of which are now clearly visible.

A multi-year funnel that has narrowed sharply

Both Fairfax and Kotak were shortlisted after submitting expressions of interest around two years ago, and bidders have since had access to a data room and conducted due diligence. A draft share purchase agreement has also been shared with prospective bidders, according to the reporting. ^[14]

Reserve price: confidential, and set late in the process

One of the most closely watched elements is the reserve price—the minimum acceptable valuation threshold that can make or break bidder appetite.

Coverage indicates the government will set a reserve price after bids are received but before they are opened, per procedures outlined in a preliminary information memorandum circulated to bidders earlier in the process. The reserve price is expected to remain confidential, not disclosed to bidders. ^[15]

Asset valuation has already been initiated

Reports also note that the government engaged valuers earlier this year, and that the valuation reports have been submitted—an important step before financial bids are evaluated against internal benchmarks and the reserve price framework. ^[16]

The timeline: why the “December-end” deadline is a major inflection point

December 2025 is not just another date marker; it is being treated as a key milestone.

Earlier this year, Reuters reported that India had completed due diligence and planned to invite financial bids for IDBI Bank in the October–December window. ^[17]

Now, on December 12, reporting converges around:

Financial bids expected by end-December
Potential spillover into early January ^[18]

In a transaction of this size, even a small extension can be meaningful—often signaling last-mile documentation, valuation negotiation, or bidder consortium/financing decisions.

Why IDBI Bank’s turnaround is central to buyer interest

Beyond the auction mechanics, IDBI Bank’s transformation is a key reason the sale is attracting heavyweight bidders at all.

In separate coverage in recent days around the stake sale, IDBI is described as a lender that has come through a major clean-up and returned to profitability after a period of stress—changing the perception from “bailout legacy” to “platform with scale.” ^[19]

That narrative matters because strategic buyers are not only bidding for an equity block—they are bidding for a ready-made banking franchise, branch network, and customer base, with the added leverage of management control if the deal closes as designed.

What to watch next

For readers tracking the IDBI Bank privatisation and its market impact, the next few weeks are likely to revolve around five practical questions:

Will bids be submitted by December-end—or pushed to early January? ^[20]
Does Fairfax formally submit an all-cash offer close to prevailing valuation? ^[21]
Does Kotak opt for a cash-and-share structure—and how will it be priced? ^[22]
Where does the confidential reserve price land relative to market expectations? ^[23]
Does Emirates NBD fully step back from IDBI as it executes the RBL deal? ^[24]

FAQs for search and discovery

Who owns IDBI Bank right now?
IDBI Bank is controlled by LIC and the Government of India, and the current plan is to sell a combined 60.72% stake with management control. ^[25]

Who are the leading bidders on December 12, 2025?
Coverage on December 12 indicates Fairfax Financial is the frontrunner, with Kotak Mahindra Bank as the other major contender still in the race. ^[26]

Why did IDBI Bank shares rise today?
Shares moved higher after reports highlighted that the bidder field has narrowed and that the bid deadline is near; IDBI stock hit an intraday high of ₹98.60 on December 12 on the BSE. ^[27]