The Indian government has given its nod to Canada-based Fairfax Financial Holdings' parent entity, Canada Inc., for the acquisition of a controlling stake in IDBI Bank. The Cabinet Committee on Economic Affairs (CCEA) approved the ₹52,878.08 crore bid for 60.72% of the bank, marking a substantial step in the lender's strategic disinvestment process.
Details of the IDBI Bank Disinvestment
The transaction encompasses the sale of a 30.48% stake previously held by the Government of India and a 30.24% stake from the Life Insurance Corporation of India (LIC). Following the completion of this deal, the government will retain a 15% share in IDBI Bank, while LIC will continue to hold a 19% stake.
Fairfax Financial's winning bid of ₹81 per share surpassed the benchmark fair value of ₹75.99 per share, which was determined by two independent valuation agencies. This acquisition represents the largest strategic disinvestment undertaken by the government since the privatization of Air India.
Impact and Future Outlook
The disinvestment of IDBI Bank is expected to bring fresh capital and strategic direction to the bank, aligning with the government's broader economic reforms and privatization agenda. This move highlights India's commitment to divesting non-core assets and inviting private sector participation in key financial institutions.