Kotak Mahindra Bank skipped IDBI bid over valuation, may reconsider if revived

Kotak Mahindra Bank opted out of the IDBI Bank disinvestment over valuation worries, though it would reconsider if the process restarts.
| Photo Credit:
Dado Ruvic

Kotak Mahindra Bank chose not to submit a financial bid for IDBI Bank during the disinvestment because the bank’s valuation was deemed excessively high, but it remains open to revisiting the idea should the process be restarted.

“From a valuation standpoint, IDBI Bank was clearly priced very high.”

“….Acquiring a controlling stake wasn’t essential for us; the price was steep and would have been hard to digest,” said Ashok Vaswani, MD & CEO, KMB.

Rising Stock Price Pushes IDBI Bank’s Valuation Upward

He pointed out that once the disinvestment was announced in 2022, IDBI Bank’s shares surged, driving up its valuation.

According to the 2022 preliminary information memorandum inviting expressions of interest for the strategic sale of IDBI Bank, the Government of India and the Life Insurance Corporation of India intended to divest shares amounting to 30.48% and 30.24% of the bank’s equity, respectively, while also handing over management control.

Disinvestment Halted as Bids Missed Target

The disinvestment effort collapsed in March 2026 after the government withdrew it because the bids received were below the minimum price threshold. Fairfax Financial and Emirates NBD were seen as the leading contenders for a controlling share in the bank.

Authorities Consider Restarting the Stake Sale

Officials indicate that the government has revived the IDBI Bank divestment plan, attracted by foreign investors’ appetite for sizable stakes in Indian banks and NBFCs, as shown by recent deals.

Published on May 2, 2026