The Reserve Bank of India (RBI) has begun evaluating at least five potential bidders interested in picking up a majority stake in state-owned IDBI Bank Ltd, as per Reuters report.
Kotak Mahindra Bank, Prem Watsa-backed CSB Bank and Emirates NBD are among those that have shown interest, but nothing can be said out in confirmation as this is a confidential discussion. Reuters report was unable to confirm the names of the other potential bidders.
The stake sale in the lender is the first major divestment across state-owned banks as part of a broader privatisation plan and could fetch the government 300 billion Indian rupees ($3.66 billion) at the current market valuation.
The federal government owns 45.48% of IDBI Bank, and is looking to divest a 30.48% stake in the lender, alongside state-owned Life Insurance Corp of India (LIC), which will sell 30.24% from its 49.24% holding in the bank.
The potential bidders have since begun due diligence on the bank, according to the report, that added financial bids were likely to be placed later this year.
The RBI is also conducting a ‘fit and proper evaluation’, including extensive background and financial checks on the potential buyers, a crucial step before an investor is allowed to pick up stake in a local bank, Reuters report added.
"The government does not intend to have any management control," the report said. "The government will take a call if a written submission to that effect is needed."