Kotak Mahindra Bank appears to have emerged as the frontrunner to buy the government’s stake in IDBI Bank, with Fairfax and Oaktree also in the race, NDTV Profit reported on Friday.

Sources to the business channel suggest that IDBI Bank’s market cap of over ₹1 lakh crore could make it difficult for any potential investor to cough up cash to buy a 60 per cent stake in the bank.

But Kotak Mahindra Bank, which has a market capitalisation of ₹4.14 lakh crore, may look at a part-cash, part-equity merger deal to buy IDBI Bank.

Kotak Mahindra Bank did not comment on the news to NDTV Profit. Earlier this week, the government suggested that a request for proposal (RFP) for the IDBI Bank stake sale would be published shortly. The Centre had earlier indicated that it wanted to wrap up the divestment by March 31, 2026.

The government and public sector insurer LIC, an investor in IDBI Bank, plans to divest a combined 60.72 per cent of stake, thereby transferring the management control to the new owner. After the transaction, the government is expected to retain a 15 per cent stake in IDBI Bank, and LIC will hold 19 per cent.

Earlier, Emirates NBD and Fairfax were seen as primary suitors for IDBI Bank and had even conducted the due diligence process. However, in October, Emirates NBD announced it will infuse $3 billion to acquire a majority stake in RBL Bank. With Emirates NBD now focussing on its announced $3 billion infusion for a majority stake in RBL Bank, Fairfax was left as the main competitive suitor.

Stock split

Kotak Mahindra Bank on Friday said its board has approved a 5-for-1 stock split. Investors who hold one equity share of face value of ₹5, would now receive five equity shares of face value ₹1 each.

The bank, which completed 40 years of operations this month, said it seeks to make its shares more affordable and boost participation from retail investors. The bank last carried out a stock split in 2010, when the face value was reduced from ₹10 to ₹5. It also issued bonus shares in a 1:1 ratio in 2015.