A major deal between Emirates NBD and RBL Bank has taken the Indian market by storm. The deal may now have significant ramifications for the government’s plans to sell its stake in IDBI Bank, potentially delaying the process, sources have told NDTV Profit.
Last week, Emirates NBD announced it will infuse $3 billion to acquire a majority stake in RBL Bank. This may have an inverse impact on Emirates NDB’s participation in IDBI Bank stake sale.
This development could leave the sale process without a key contender, thereby pushing the sale beyond the government’s targeted timeline. The government’s target was to finish the sale by the end of this fiscal.
The Department of Investment and Public Asset Management (DIPAM) is managing the sale of a 61% stake in IDBI Bank.
Sources told NDTV Profit that the process requires at least two serious, competing bids to move forward effectively.
Both Emirates NBD and Fairfax were previously seen as the primary suitors for IDBI Bank and had even conducted the due diligence process.
But with Emirates NBD now focusing on its announced $3 billion infusion for a majority stake in RBL Bank, Fairfax is left as the main competitive suitor.
Other firms are in the fray, but they are few and far between. The likes of Oaktree Capital and Kotak Mahindra Bank have emerged as potential alternatives, but they have only shown ‘sluggish interest’ so far.
This lack of a strong second bidder may serve as a real blow to the IDBI sale, casting doubt on DIPAM’s goal to complete the privatisation within the 2026 fiscal year.
The coming months, therefore, could prove to be critical as the government desperately looks for a serious suitor to compete with Fairfax for the IDBI stake sale.
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