The Union Cabinet has approved the sale of a 60.72% stake in IDBI Bank to Fairfax Financial Holdings’ subsidiary, 10955230 Canada Inc., for approximately Rs 52,878 crore, according to media reports published on Wednesday.
The transaction involves the sale of a 30.48% stake held by the central government and a 30.24% stake held by the Life Insurance Corporation of India (LIC). Fairfax’s winning bid was Rs 81 per share.
If completed, the deal will transfer management control of the lender to Fairfax. The government and LIC are expected to retain stakes of around 15% and 19%, respectively, leaving them with a combined 34% holding.
Finance Minister Nirmala Sitharaman described the move as a strategic restructuring, rather than a complete government exit from the bank.
IDBI Bank was reclassified as a private sector bank by the Reserve Bank of India in March 2019, following LIC’s increased shareholding and the dilution of the government’s majority stake.
The transaction remains subject to the applicable regulatory requirements and completion of the necessary procedures. The exact completion timeline should be confirmed through an official announcement.
If finalised, the deal would mark a major development in India’s banking sector and represent the largest foreign direct investment in the country’s financial sector, according to government statements.
