India’s government has approved the sale of a controlling stake in IDBI Bank to Canada’s Fairfax Financial Holdings, Information Minister Ashwini Vaishnaw said on Wednesday, in a deal worth more than 520 billion rupees. Fairfax will acquire the combined 60.72 percent stake held by the federal government and state run Life Insurance Corporation of India for 528.78 billion rupees, about $5.6 billion, at 81 rupees a share.
The price is an 11 percent discount to IDBI’s previous closing price of 90.4 rupees and values the lender at roughly 871 billion rupees. After completion, the government and LIC will retain a combined 34 percent holding, and Fairfax, the Toronto based group led by Prem Watsa, will hold majority control. The transaction is the largest foreign investment in India’s financial sector.
The sale has been a long time coming. New Delhi first announced the IDBI privatisation in 2022, but the process dragged on regulatory and procedural issues and was shelved in March after bids fell short of the government’s price expectations. Fairfax already owns about 40 percent of the smaller CSB Bank, and Reserve Bank of India rules bar one entity from operating two banks, so completion is expected to require a plan, reportedly up to two years, for Fairfax to sell or merge that holding, alongside formal RBI and SEBI approvals.