IDBI Bank Limited has disclosed a regulatory filing regarding the strategic restructuring approved by the Ministry of Finance. The Cabinet Committee on Economic Affairs (CCEA) has approved M/s 10955230 Canada Inc. (parent entity M/s Fairfax Financial Holdings Ltd.) as the Strategic Buyer for acquiring 60.72% stake in IDBI Bank Ltd.

Transaction Details

  • Purchase Consideration: ₹52,878.0806181 Crores (Rupees Fifty-Two Thousand Eight Hundred Seventy-Eight Crore Eight Lakh Six Thousand and One Hundred Eighty-One only)
  • Stake Distribution: 30.48% equity shareholding held by Government of India and 30.24% equity shareholding held by Life Insurance Corporation of India (LIC)
  • Price per Share: ₹81 per share (winning bid)
  • Residual Shareholding: GoI will retain 15% and LIC will retain 19% equity stake post-transaction

Bidding Process

The transaction followed a two-stage competitive bidding process:

  • Preliminary Information Memorandum (PIM) issued on October 7, 2022
  • Five parties initially submitted Expression of Interest, four qualified as per eligibility criteria
  • Two parties finally submitted techno-financial bids and became Qualified Bidders
  • Initial bids in FY 2025-26 fell short of reserve price of ₹94.42 per share
  • Best offer bids invited in FY 2026-27

Valuation Methodology

Two independent professional valuation agencies used two methodologies:

1. Market Multiple Method: Relative valuation based on 31st March, 2026 closing accounts of all public sector banks

2. Asset Valuation Method: Considered both tangible and intangible assets including land and properties along with liabilities, based on 31st March, 2026 audited accounts of IDBI Bank

  • Benchmark Price: ₹75.99 per share (average of two valuations)
  • Stock market price was disregarded due to volatility (range ₹61.01 to ₹118.38 during valuation period)

Historical Context

  • IDBI Bank was under RBI's Prompt Corrective Action Framework from May 5, 2017 to March 10, 2021
  • Bank required repeated capital infusion from GoI and LIC due to poor financial health
  • Pre-EoI stock price (October 7, 2022): ₹42.40 per share
  • Stock price before initial bids (January 8, 2026): ₹108.12 per share
  • Stock price before best offer bids (May 18, 2026): ₹70.38 per share

Next Steps

  • Successful bidder to present credentials to RBI for Fit & Proper assessment
  • Submission of roadmap for compliance with regulatory conditions
  • GoI residual stake (15%) to be sold through open market via Alternative Mechanism
  • LIC to manage its 19% residual shareholding as per internal procedures and regulatory directions