India's biggest bank privatisation in years nears as Fairfax sweetens IDBI Bank bid: Report

India's long-awaited privatisation of IDBI Bank has moved a step closer, with the Centre reportedly nearing acceptance of a revised offer from Canada's Fairfax Financial Holdings after the company agreed to marginally improve its bid, Bloomberg News reported on Tuesday.

The report said Fairfax, whose earlier valuation fell below the government's undisclosed reserve price, is likely to increase its per-share offer by a few rupees. The report said that negotiations are in the final stages but declined to disclose the revised price as the discussions remain confidential.

If completed, the transaction would mark the largest government-backed sale of a majority stake in an Indian bank in years, delivering a significant milestone for the Narendra Modi government's disinvestment programme.

The proposed deal still requires approval from the Union Cabinet and the Reserve Bank of India before it can be finalised, Bloomberg News reported.

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The government has been trying to privatise the Mumbai-headquartered lender for several years as part of its strategy to reduce its presence in non-strategic sectors and improve the efficiency of state-owned enterprises. However, the process has faced multiple delays despite attracting interest from strategic investors.

Bloomberg had earlier reported that Fairfax, founded by Indian-born Canadian billionaire Prem Watsa, had emerged as the leading contender to acquire the stake, while Dubai-based Emirates NBD had also submitted a bid.

Separately, Reuters reported recently that Fairfax had brought capital into India ahead of a potential acquisition of the IDBI Bank stake, indicating that preparations for the transaction were progressing.

The Centre and state-run Life Insurance Corporation of India (LIC) together own around 95 per cent of IDBI Bank. Under the proposed privatisation, they plan to sell a combined 60.72 per cent stake, with the government divesting 30.48 per cent and LIC selling 30.24 per cent, along with transferring management control to the successful bidder.

A successful sale would represent one of the Modi government's most significant privatisation achievements in the financial sector and could pave the way for further strategic disinvestment in state-owned enterprises.