New Delhi: The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved Canada-based Fairfax Financial Holdings Ltd.’s subsidiary, 10955230 Canada Inc., as the strategic buyer for a 60.72% stake in IDBI Bank Ltd. for ₹52,878.08 crore.
The proposed transaction involves the sale of 30.48% equity held by the Government of India and 30.24% held by the Life Insurance Corporation of India (LIC). Following the sale, the government will retain a 15% stake, while LIC will hold 19%.
According to the Ministry of Finance, the decision follows a competitive bidding process involving multiple stages of scrutiny and evaluation. Of the five parties that initially submitted expressions of interest, four qualified under the prescribed criteria, while two ultimately submitted technical and financial bids.
The government said the winning bid of ₹81 per share was higher than the benchmark valuation of ₹75.99 per share, based on the average of valuations conducted by two independent professional agencies.
The valuation agencies used market-multiple comparisons with public sector banks and an asset valuation method that considered the bank’s tangible and intangible assets, properties and liabilities, based on financial information as of March 31, 2026.
The initial bidding round in 2025-26 failed to produce an acceptable offer. The government subsequently invited improved offers from qualified bidders in 2026-27 to maximise the transaction’s value.
The government said IDBI Bank’s volatile stock price was not considered a reliable indicator of its intrinsic value for the final assessment.
The successful bidder must complete the Reserve Bank of India’s fit-and-proper assessment and submit a roadmap for complying with applicable regulatory conditions.
The government described the transaction, once completed, as the largest foreign direct investment in India’s financial sector to date.
The CCEA has also authorised the sale of the government’s residual 15% stake through the open market under the prescribed procedure. LIC may manage its remaining 19% holding in accordance with its internal procedures and regulatory requirements.
