A new twist in the IDBI Bank privatisation race, Kotak's entry adds to the buzz.

IDBI Bank Privatisation: IDBI Bank's privatisation is once again in the headlines, this time due to Kotak Mahindra Bank's interest. Oaktree Capital and Fairfax are already in the race, but Kotak's entry has intensified the competition. Acquiring a 60% stake in a bank with such a large market cap will not be easy, but reports suggest that Kotak could pursue a smart deal with cash and shares. The government aims to complete this process by 2026. All eyes are now on whether this historic deal will materialise soon.

IDBI Bank Privatization: Discussions surrounding IDBI Bank's privatisation have been ongoing for a long time, and now the news has gained momentum again. According to a media report, Kotak Mahindra Bank has also joined the race to acquire a stake in IDBI Bank. Previously, global investors like Oaktree Capital and Fairfax have expressed interest. However, Kotak Mahindra Bank has neither confirmed nor explicitly denied this claim.

What's the problem with such a large deal?

Reports indicate that the biggest challenge facing investors is IDBI Bank's massive market cap. The bank is valued at around ₹1 lakh crore. Therefore, acquiring a 60% stake will not be easy for any investor. It is being said that Kotak Mahindra Bank may pursue a merger deal combining cash and shares to reduce the burden.

When will the government finalize the deal?

The government has already stated that it intends to complete the privatization of IDBI Bank by the end of fiscal year 2026. Currently, the government holds 45.48% and LIC holds 49.24%. DIPAM is overseeing the process of selling a total 61% stake. Another report states that due diligence for the stake sale has been completed, and financial bids may be invited between October and December.

Why is LIC's role now solely that of an investor?

Some time ago, LIC was registered as a financial investor, not a promoter, in IDBI Bank. This means that LIC will no longer interfere in the bank's management, but will remain solely as an investor.

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