The race for IFCI has entered the final stage with 10 bidders - both domestic and international - in the fray to acquire up to 26% stake in India's oldest financial institution. While the names of bidders will only be known on Saturday afternoon when the expression of interest is opened, the only name that was confirmed was a consortium comprising Japan's Shinsei Bank, US investor JC Flowers and state-run Punjab National Bank.

PNB and IFCI had earlier agreed on a merger proposal brokered by government but deal fell through since the bank's management felt that the FI did not fit into its portfolio. But a change of management at the bank and IFCI's recovery have forced a rethink.

While there were reports of Blackstone, Cargill, WL Ross and IDFC too submitting bids on the last day, at least two players - IDBI and Life Insurance Corporation - who already hold stakes and were widely expected to bid were absent.

While LIC chairman T S Vijayan said bidding for IFCI was "not compatible with the insurance company's liabilities", sources in IDBI said, the Delhi-headquartered FI's shares were over priced. "We could have acquired the entire stake in IFCI years ago and merged it. Instead, we chose to prune out holdings. It still does not make sense for us to buy more stake or go for a merger," an IDBI executive said.

IFCI, the oldest development finance institution, like its erstwhile competitors IDBI, ICICI and IIBI specialised in term lending based on low-cost funds raised on government guarantee. But over the years the business model was found flawed resulting in ICICI and IDBI turning banks while IIBI shut shop.