The Union Cabinet has approved the sale of a 60.72% stake in IDBI Bank to Fairfax Financial Holdings Limited, a Canada-based financial services company, for approximately ₹52,878 crore. The transaction marks a major step in the government’s long-running disinvestment process and is described as the country’s biggest strategic disinvestment since Air India was sold.
The decision was taken by the Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, during a meeting on Wednesday. The proposed acquisition will give Fairfax control of IDBI Bank, subject to the completion of the transaction and receipt of the required regulatory approvals.
IDBI Bank Disinvestment: Government and LIC to Sell Their Stakes
The proposed transaction involves the combined sale of shares held by the central government and the Life Insurance Corporation of India (LIC), the state-owned insurance company.
Under the deal, the government will sell its 30.48% stake in IDBI Bank, while LIC will divest its 30.24% holding. Together, these shares account for 60.72% of the bank.
The government said the Cabinet Committee on Economic Affairs had approved the transaction with 10955230 Canada Inc., a company whose parent is Fairfax Financial Holdings Limited, as the strategic buyer. The statement cited a transaction value of ₹52,877.08 crore.
Following the proposed sale, the central government is expected to retain a 15% stake in IDBI Bank, while LIC will continue to hold 19%.
IDBI Bank Deal Could Become a Record Foreign Investment
The proposed acquisition is a significant development in the government’s efforts to complete the strategic disinvestment of IDBI Bank, a process that has been underway for more than five years.
According to the government, once finalised, the transaction will represent the largest foreign direct investment (FDI) in India’s financial sector.
Information and Broadcasting Minister Ashwini Vaishnaw also addressed the media following the Cabinet’s decision. The deal is expected to bring the bank under private-sector control while allowing the government and LIC to reduce their combined shareholding.
However, the transaction is not yet complete. It remains subject to the necessary regulatory clearances and other applicable approvals.
When Will the Fairfax Acquisition Be Completed?
Arunish Chawla, Secretary of the Department of Investment and Public Asset Management (DIPAM), said the transaction is expected to be completed during the current financial year.
He also stated that the interests of IDBI Bank employees would be taken into account as the process moves forward.
As part of the acquisition, Fairfax will be required to make an open offer to the bank’s minority shareholders, in accordance with the applicable requirements.
Fairfax also holds a stake in CSB Bank. Under the stated conditions, it will have to either merge CSB Bank with IDBI Bank within two years or exit its investment in CSB Bank by selling its stake.
The completion of the transaction will depend on meeting the relevant conditions and obtaining all required approvals.
Disclaimer: This article is intended for general informational purposes only and should not be considered investment, financial or legal advice. Details of the proposed IDBI Bank stake sale, transaction value and regulatory conditions are based on the information provided and may be subject to change. Readers should refer to official government announcements, regulatory filings and company disclosures for the latest confirmed updates before making investment decisions.
