The Carlyle Group Inc. (NasdaqGS:CG), Fairfax Financial Holdings Limited (TSX:FFH), and DBS Bank Ltd. are considering to bid for at least 10% each in IDBI Bank Limited (BSE:500116) as part of the government's ongoing share sale process, two people, including a government official, said. Private equity firms Carlyle and Fairfax and Singaporean lender DBS Bank have communicated with the department of investment and public asset management (Dipam), finance ministry officials, and the investment banker hired for the largest privatization in India's banking space regarding the sale process, the people said, requesting anonymity. KPMG is the adviser managing the IDBI Bank privatization.

During meetings with potential investors, the government has seen significant interest from buyers willing to offer the government's minimum target value of over $4.3 billion (about INR 350,000 million) for up to 63% of IDBI Bank, the people said. While a spokesperson from Carlyle declined to comment, emails sent to Fairfax and the finance ministry did not elicit a response. A KPMG spokesperson declined to comment on any company specific matter.

To be sure, Carlyle, Fairfax and DBS Bank's queries to the finance ministry seeking clarifications or assurances from the government regarding the IDBI Bank privatization may not result in financial bids. "Pre-bid meetings are going on. Fairfax and Carlyle have asked for clarity from the government on what exactly the 'public sector nature' of the bank means currently and how that will change post the proposed privatization of IDBI Bank," said one of the two people.

Last week, The Economic Times reported, citing unidentified people, that Sumitomo Mitsui Financial Group, Inc. (TSE:8316) and another global bank are among five investors that have sought information from the government about the sale of equity in IDBI Bank through a formal query process that closed on November 10, 2022 . "DBS Bank has asked for an assurance that the government will not have any say in IDBI Bank's equity sale or related processes, post the proposed privatization via QIP of IDBI Bank," said the first person. A DBS Bank India spokesperson said, "The reports of DBS's interest in the transaction are unfounded." The deadline for submission of expressions of interest (EoIs), or initial financial bids for IDBI Bank stake purchase, is December 16, 2022 .

"Depending on the prices offered by the potential investors, the reserve price for final bidding will be decided by Dipam," said the second person. "Most of the gains in IDBI Bank stock have come very recently, and one cannot ignore that the bank, even though profit-making, is still in the process of getting rid of its stressed assets. Therefore, the government's expectation for a valuation of over $4.3 billion for a 61% to 63% stake could be a bit ambitious," said the head of an investment banking firm.