The Union Cabinet on Wednesday approved the strategic sale of a 60.72% stake in IDBI Bank Ltd , along with the transfer of management control to Canadian financial services company Fairfax Financial Holdings Ltd for ₹ 52,878.08 crore, in the largest strategic disinvestment deal ever, and also the largest investment by a foreign financial services company in the country.
Fairfax is founded by Prem Watsa, a Canadian businessman of Indian origin who was born in Hyderabad and graduated from the Indian Institute of Technology, Madras. The restructuring of IDBI will help in meeting capital requirements of micro, small and medium enterprises (MSMEs), he added. It left the quantum of stake sale to the Union government and LIC , in consultation with the Reserve Bank of India (RBI).
Of the 60.72%, 30.48% will come from the government’s holding and 30.24% from that of state-owned Life Insurance Corporation of India (LIC). Post-sale the government’s stake in the company will reduce to 15%, LIC’s to 19% . Minority retail shareholders own around 4% of the bank. The Government of India and LIC together will hold 34% equity stake in IDBI Bank post restructuring, the minister said. A stake of 26% is usually adequate to block special resolutions. CCEA on May 5, 2021 gave its in principle approval for the strategic disinvestment along with transfer of management control in IDBI Bank Ltd. Even though the Union government and LIC together hold 94.72% equity stake in IDBI Bank, the bank was classified as a private sector one by RBI with effect from January 21, 2019.
The company owns the majority stake in CSB (formerly Catholic Syrian Bank), but, as part of its bid for IDBI, has already said it will divest that holding to meet Reserve Bank of India requirements. After comprehensive evaluation, CCEA in its meeting held on October 14, 2026 “approved M/s 10955230 Canada Inc. (parent entity M/s Fairfax Financial Holdings Ltd.) as the Strategic Buyer for this Transaction” for a purchase consideration of ₹ 52,878.08 crore for the acquisition of 60.72% stake (of the government and LIC combine) in the IDBI Bank, the finance ministry’s statement said.
IDBI Bank is a scheduled commercial bank regulated by RBI. Due to its poor financial health, the bank required repeated infusion of capital, initially provided by the government and later by the LIC. The winning bid was ₹ 81 per share, above the benchmark fair value of ₹ 75.99 per share as per calculation done by two independent valuation agencies using market-multiple and asset-valuation methods, according to the statement. Shares of IDBI Bank closed at ₹ 90.44 per share, up 9% on Wednesday.. On May 5, 2017, RBI put IDBI Bank under the Prompt Corrective Action Framework and imposed several restrictions in view of its non-performing assets and losses . After considering the improvement in the bank’s financial health, RBI in 2021, lifted these restrictions.
