New Delhi, October 14: The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved the sale of a 60.72% stake in IDBI Bank to 10955230 Canada Inc., whose parent is Fairfax Financial Holdings, for about ₹52,878 crore.
The stake comprises 30.48% held by the Government of India and 30.24% held by the Life Insurance Corporation of India (LIC). After the sale, the government will hold 15% and LIC 19%.
According to the Finance Ministry, the deal will be the largest foreign direct investment in India’s financial sector so far once it is completed.
₹81 a share
The winning bid was ₹81 per share. Two independent valuation agencies put the bank’s fair value at an average of ₹75.99 per share, which was used as the benchmark. Because the bid was above this benchmark and above both valuations, it was judged reasonable and approved.
The valuers used a market multiple method based on public sector bank accounts as of March 31, 2026, and an asset valuation method based on IDBI Bank’s audited accounts. The ministry said the stock market price was set aside because the thinly traded share had swung between ₹118.38 and ₹61.01 during the valuation period.
How the sale ran
Expressions of interest were invited in October 2022. Only parties found fit and proper by the Reserve Bank of India and cleared by the Home Ministry could bid. Of five parties, four qualified and two submitted final bids.
Initial bids in 2025-26 fell short of the reserve price of ₹94.42 a share and were not approved. Best-offer bids were then invited from the qualified bidders in May 2026.
Background and next steps
IDBI Bank needed repeated capital infusions, first from the government and later from LIC. The RBI placed it under its Prompt Corrective Action framework in May 2017 and lifted the restrictions in March 2021.
The buyer must now present its credentials to the RBI and submit a roadmap for meeting regulatory conditions. The CCEA has also allowed the government’s remaining 15% to be sold in the open market later, while LIC can manage its residual stake under its own procedures.
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