IDBI Home Finance has attracted three suitors, Tata Capital Ltd, Religare Enterprises Ltd and Dewan Housing Finance Ltd. IDBI Bank's board will meet on 23 January to select the most suitable bidder for the home finance arm.

IDBI Bank had received around 10-12 proposals from potential buyers of its wholly-owned subsidiary IDBI Homefinance (IHFL).

The proposals have now been shortlisted to three, with Dewan Housing reported to have emerged the forerunner , with its bid of Rs311 crore.

Unconfirmed reports say that the offers by Tata Capital and Religare were Rs225 crore and Rs211 crore respectively.

IDBI Home finance reported profit after tax of Rs298.8 crore in 2007-08.

The loan portfolio of the company comprises of 97 per cent of salaried individuals at varying rates of interest. As on 31 march 2008, the capital adequacy norms of the company stood at 16.1 per cent as against the prescribed NHB norms of 12 per cent.

The bank decided to sell the housing finance unit to consolidate its home loan business, which is presently being offered through the IDBI's own home loan finance unit as well as through IHFL.

As the bank felt there was no need to run the same business from two of its units, it explored the option of either consolidating them into one by merging IHFL with the bank or divesting it.

The bank felt that ince merging the two would raise issues of integrating the mployees of the two units, it opted to sell IHFL.
 
With valuations under pressure in the wake of the current downturn in the financial markets, IDBI may not get what it expects. 

IDBI Bank had taken over the erstwhile Tata Home Finance in September 2003, renaming it IHFL with a view to operating a separate unit for its home loans business.

IHFL presently has a home-loan portfolio of above Rs2,700-crore and a presence in 18 centres across the country with 150 employees.

The Kapil Wadhawan-headed DHFL has an asset base of over Rs3,580 crore, with a strong presence across India through its 72 branches and 116 service locations.

DHFL caters to a large section of Indians working in the Middle East through its over seas branch in Dubai. This year it open another international office at London.