The Cabinet Committee on Economic Affairs (CCEA) approved Canada-based Fairfax Financial Holdings Ltd. as the strategic buyer for a 60.72% stake in IDBI Bank for approximately ₹52,878.08 crore, marking the largest foreign direct investment (FDI) in India’s financial sector once completed.
Key Points:
- Strategic Buyer: Fairfax Financial Holdings Ltd. (Canada).
- Total Stake Sale: 60.72% — Government of India (30.48%) and Life Insurance Corporation of India (LIC) (30.24%).
- Sale Price: ₹81 per share, exceeding the benchmark valuation of ₹75.99 per share.
- Government’s Remaining Stake: 15%.
- LIC’s Remaining Stake: 19%.
- Disinvestment Process: The sale followed a two-stage competitive bidding process overseen by government committees.
- Background: The RBI placed IDBI Bank under the Prompt Corrective Action (PCA) framework on 5 May 2017 due to non-performing assets and losses. Restrictions were lifted on 10 March 2021 following improvements in its financial health.
- Further Disinvestment: The CCEA authorised the sale of the government’s remaining 15% stake through the open market under standard procedures.
