Government Approves ₹52,878 Crore Sale of IDBI Bank Stake
Fairfax Financial-backed entity selected to acquire 60.72% stake held by the Centre and LIC, subject to regulatory requirements.
- Fairfax-backed entity selected for IDBI Bank stake
- ₹52,878 crore purchase consideration approved
- Winning bid fixed at ₹81 per share
- RBI regulatory clearance remains a key requirement
GG News Bureau
New Delhi, 15th Oct: The Cabinet Committee on Economic Affairs (CCEA) has approved the selection of Canada-based Fairfax Financial Holdings’ parent entity, 10955230 Canada Inc., as the strategic buyer for a 60.72% stake in IDBI Bank Ltd. for ₹52,878.08 crore.
The transaction involves the sale of the Government of India’s 30.48% stake and LIC’s 30.24% stake. Following the sale, the Centre will retain 15% and LIC 19% in the bank.
The government said the strategic disinvestment followed a competitive bidding process involving initial expressions of interest, eligibility checks and financial bids. Five parties initially expressed interest, four qualified, and two ultimately submitted bids.
The successful offer of ₹81 per share exceeded the benchmark fair value of ₹75.99 per share, calculated using independent valuation methods. The government said the offer was therefore considered reasonable and approved.
IDBI Bank had earlier faced financial stress and was placed under the Reserve Bank of India’s Prompt Corrective Action framework in 2017. Restrictions were lifted in 2021 after improvements in its financial position, subject to conditions and monitoring.
The successful bidder must meet the RBI’s fit-and-proper requirements and comply with regulatory conditions before the transaction is completed. The CCEA has also authorised a possible future sale of the Centre’s remaining 15% stake through the open market, following the prescribed procedure.
