IDBI Bank Privatization: Prem Watsa Leads the Race to Acquire Majority Stake

IDBI Bank Privatization: The privatization of another public sector bank in India, IDBI Bank, is set to take a significant step forward. The Reserve Bank of India (RBI) has cleared the path for the bank’s sale by granting the “fit and proper” approval to the potential bidders. With this clearance, the government is expected to invite financial bids for IDBI Bank within this financial year.

Who is Buying IDBI Bank?

According to reports from Moneycontrol, three major players are in the race to acquire a majority stake in IDBI Bank. These are:

1. Fairfax India Holdings
2. NBD Emirates
3. Kotak Mahindra Bank

IDBI Bank Privatization

Among them is Indian-origin Canadian billionaire Prem Watsa, a Canadian-born businessman. It is here that the entity Fairfax India Holdings is reportedly targeting a 60.7 percent stake in IDBI Bank, covering the combined stakes owned by the Government of India and Life Insurance Corporation of India.

A Man About Fairfax: Prem Watsa

Known for his nickname as the “Canadian Warren Buffett,” Prem Watsa is the founder and chairman of Fairfax Financial Holdings. Born in Hyderabad, India, Watsa came to Canada to pursue higher education, where he received his MBA. He started Fairfax in 1985 with refinancing a small Canadian insurance company called Markel Financial, which he later renamed Fairfax Financial. Through years, he built a global conglomerate into businesses of insurance, reinsurance, and investments.

Fairfax is no newcomer to India. It has invested in several ventures, including CSB Bank, where it serves as a promoter. Watsa has also co-founded the BlackNorth Initiative and serves as vice-chairman of Hamblin Investment Council.

Watsa has been able to keep in touch with his Indian roots despite being a Canadian. His business interests in India have increased many times over, contributing to his net worth of about $1.8 billion globally, as estimated by Forbes.

What’s Next for IDBI Bank?

The government, along with LIC, currently holds a significant stake in IDBI Bank, and the upcoming financial bids will determine its privatization timeline. Fairfax India’s position as the leading bidder indicates keen interest in expanding its financial footprint in India, though details regarding the transaction’s timeline and structure remain under wraps.

The successful privatization of IDBI Bank will be a landmark in India’s overall disinvestment strategy, marking increased private participation in the banking sector. All eyes are now on the final bidding process and the impact this deal could have on the Indian financial ecosystem.