The Cabinet Committee on Economic Affairs (CCEA) has approved the strategic restructuring of IDBI Bank Ltd., culminating in the sale of a 60.72% equity stake to M/s 10955230 Canada Inc., the parent entity of M/s Fairfax Financial Holdings Ltd., for a total consideration of Rs 52,878.0806181 crores. This stake comprises 30.48% from the Government of India (GoI) and 30.24% from the Life Insurance Corporation of India (LIC), reducing their residual shareholdings to 15% and 19%, respectively.
The transaction was executed through a competitive two-stage bidding process overseen by an Inter-Ministerial Group, a Core Group of Secretaries on Disinvestment, and an Alternative Mechanism of empowered Cabinet Ministers. The process began with an Expression of Interest (EoI) issued on October 7, 2022. From five initial interested parties, four qualified based on RBI's 'fit and proper' and MHA security clearances, ultimately resulting in two qualified bidders submitting techno-financial bids.
The winning bid from Fairfax Financial Holdings was set at Rs 81 per share, which exceeded the independently determined benchmark price of Rs 75.99 per share. This benchmark was derived from the average of two valuation methodologies: a Relative Valuation by Market Multiple Method using March 31, 2026, closing accounts of all public sector banks, and an Asset Valuation Method based on IDBI Bank's audited accounts from the same date. The CCEA has delegated authority to the Alternative Mechanism for the future sale of the GoI's residual 15% stake via the open market, while LIC will manage its 19% residual stake in compliance with its regulators.
The successful bidder must now present its credentials to the Reserve Bank of India for a final fit and proper assessment and submit a roadmap for meeting regulatory conditions. Upon completion, this transaction will mark the largest Foreign Direct Investment in the history of India's financial sector.