Stories
Govt to Sell 60.72% Stake in IDBI Bank to Fairfax for Rs 52877 Crore
- •The government and LIC will sell a combined 60.72 per cent stake in IDBI Bank to Canada-based 10955230 Canada Inc., an entity of Fairfax Financial Holdings Ltd., for Rs 52,878.08 crore.
- •This transaction marks India's biggest strategic disinvestment since the sale of Air India and the largest foreign direct investment in the financial sector.
- •Following the deal, the government will retain a 15 per cent stake and LIC will hold 19 per cent, with both withdrawing their nominees from the bank's board.
- •The winning bid from Fairfax exceeded the government's benchmark valuation and fair-value estimates provided by independent valuation agencies.
- •The successful bidder must now present its credentials to the Reserve Bank of India for a fit-and-proper assessment and submit a regulatory compliance roadmap.
Key Questions Answered
The government and the Life Insurance Corporation of India (LIC) are selling a combined 60.72 per cent stake in IDBI Bank to Canada-based 10955230 Canada Inc., a parent entity of Fairfax Financial Holdings Ltd., for Rs 52,878.08 crore. The government will sell 30.48 per cent while LIC will divest 30.24 per cent.
The successful bidder must present its credentials to the Reserve Bank of India (RBI) under the fit-and-proper assessment process and submit a roadmap for complying with prescribed regulatory conditions. Additionally, the transaction will require final approvals.
Following the transaction, the government will retain a 15 per cent stake in IDBI Bank, while LIC will hold 19 per cent. Both shareholders will withdraw their nominees from the bank's board and become public shareholders.
