The Union Cabinet has approved the sale of a 60.72% stake in IDBI Bank to Canada-based Fairfax Financial Holdings’ subsidiary, 10955230 Canada Inc., for ₹52,877.07 crore.
The central government owns 30.48% of the company, while the Life Insurance Corporation of India (LIC) owns 30.24%. At ₹81 per share, Fairfax was able to close the purchase.
The government described the transaction as a major foreign investment in India’s financial sector. Once completed, it will transfer management control of the bank to the new strategic investor, subject to regulatory approvals.
Finance Minister Nirmala Sitharaman called the move a strategic restructuring, clarifying that the government and LIC would continue to hold shares in the lender.
The Reserve Bank of India’s assessment of Fairfax’s eligibility to own and manage a bank will be a key step before the transaction is completed.
Fairfax, which also holds a stake in CSB Bank, will have to merge its holding with IDBI Bank or exit it within two years. The investor will also be required to make an open offer to IDBI Bank’s minority shareholders.
The transaction is anticipated to be finished by the end of the current fiscal year, according to DIPAM Secretary Arunish Chawla.