New Delhi, October 14: The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved M/s 10955230 Canada Inc., the parent entity of Fairfax Financial Holdings Ltd., as the strategic buyer for a 60.72% stake in IDBI Bank Ltd. for ₹52,878.08 crore.
The proposed acquisition comprises a 30.48% stake held by the Government of India and a 30.24% stake held by the Life Insurance Corporation of India (LIC).
Following the transaction, the government will retain a 15% stake in IDBI Bank, while LIC will retain 19%, according to an official statement issued by the Press Information Bureau.
The government said the winning bid of ₹81 per share was above the benchmark price of ₹75.99 per share determined through independent valuation exercises, as well as the fair-value estimates of both valuation agencies.
The transaction followed a competitive, two-stage bidding process involving initial expressions of interest, eligibility assessments and financial bids. Of the five parties that initially submitted expressions of interest, four qualified under the prescribed criteria, while two ultimately submitted techno-financial bids.
The government said the initial bids invited in the 2025-26 financial year fell short of the reserve price of ₹94.42 per share and were not approved. Qualified bidders were subsequently invited to submit their best offers in the 2026-27 financial year.
For the final evaluation, two independent professional valuation agencies assessed the bank using the market-multiple method and the asset-valuation method, based on the financial position of public sector banks and IDBI Bank’s audited accounts as of March 31, 2026.
The average valuation of ₹75.99 per share was adopted as the benchmark for evaluating the qualified bids. The successful offer of ₹81 per share was considered reasonable and approved by the CCEA.
The successful bidder will be required to present its credentials to the Reserve Bank of India (RBI) under the prescribed fit-and-proper assessment process and submit a roadmap for compliance with regulatory conditions.
The government said completion of the transaction would make it the largest foreign direct investment in India’s financial sector to date.
The CCEA has also delegated powers to the Alternative Mechanism to undertake the sale of the government’s residual 15% stake through the open market, in accordance with the prescribed standard operating procedure. LIC will be free to manage its remaining shareholding under its internal procedures, subject to applicable regulatory directions.
IDBI Bank had been placed under the RBI’s Prompt Corrective Action framework on May 5, 2017, following concerns over non-performing assets and financial losses. The restrictions were lifted in March 2021, subject to conditions and continued monitoring, after an improvement in the bank’s financial health.
The strategic sale is part of the government’s restructuring plan for the bank, which had previously required capital support from the government and LIC.
