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Emirates NBD makes its second M&A play for an Indian bank: Emirates NBD is among international suitors who submitted bids to acquire a stake in India’s state-owned Industrial Development Bank of India (IDBI), a transaction expected to close next month, Reuters reports, citing sources it says are in the know.
Who else is vying for IDBI? The Dubai-based lender is reportedly competing against Canada’s Fairfax for 60.7% of IDBI — estimated to be worth over USD 7.5 bn. Reuters also name-checked Kotak Mahindra Bank as a potential bidder, but the bank denied the claim. IDBI Bank’s market cap sits at USD 12.6 bn, with its share price climbing 26% over the past year in anticipation of the sale, which was first announced in 2022.
This has been a long time coming: Emirates NBD was previously said to be eyeing the bank in 2024 and was among those shortlisted for the sale in August.
Our take? Emirates NBD’s twin bids for IDBI and RBL signal a multi-bn USD push into India’s financial sector that we think could eventually tilt toward consolidation. The bid suggests Emirates NBD’s push into India remains intact despite the regulatory hurdles it’s navigating. The DFM-listed lender’s USD 3 bn attempt to take over RBL Bank hit a snag last week, triggering change-of-control reviews.
India laid the groundwork for this divestment: IDBI was reclassified as a private-sector bank in 2019, bringing it under the 74% foreign ownership cap and allowing Emirates NBD to pursue a 60% stake. In addition, IDBI already has a footprint in Dubai through its DIFC-based corporate branch, which is regulated by the DFSA — a factor that could also help streamline the fit-and-proper due diligence for Emirates NBD.
The pattern: India is opening its banking sector to foreign investments as part of a bid to scale up its domestic banks onto a global stage. Japanese investors have already made significant inroads in the financial sector, most notably the USD 4bnacquisition of Shriram Finance by MUFG. Rivalling these investments are Gulf majors, such as Abu Dhabi’s International Holding Company, which acquired a 41% stake worth USD 1bn in Sammaan Capital.
