Fairfax Financial Acquires 60.72% Stake in IDBI Bank
The Government of India and LIC sold a majority stake in IDBI Bank to Canada's Fairfax Financial Holdings for approximately ₹52,878 crore.
The Cabinet Committee on Economic Affairs approved the sale of a 60.72% stake in IDBI Bank to Canada-based Fairfax Financial Holdings for approximately ₹52,878 crore ($5.43 billion). The transaction involves the Government of India divesting 30.48% and the Life Insurance Corporation of India divesting 30.24%.
Fairfax offered ₹81 per share, which exceeded the independent valuation benchmark of ₹75.99. Following the transaction, the government and LIC will jointly retain a 34% interest, with the government holding 15% and LIC holding 19%. This deal marks the largest foreign direct investment in India's financial sector and the largest strategic disinvestment since the sale of Air India.
To comply with Reserve Bank of India regulations prohibiting the ownership of two separate banks, Fairfax must either merge its existing stake in CSB Bank with IDBI Bank or sell the CSB stake within two years. The share purchase agreement is expected to be executed by the end of the calendar year.
