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Cabinet approves Rs 52,878 crore IDBI Bank sale to Fairfax arm in India’s largest financial-sector FDI

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Cabinet approves Rs 52,878 crore IDBI Bank sale to Fairfax arm in India’s largest financial-sector FDI

Cabinet approves Rs 52,878 crore IDBI Bank sale to Fairfax arm in India’s largest financial-sector FDI

The Cabinet Committee on Economic Affairs has approved the strategic sale of IDBI Bank to a Fairfax Group arm, Union Minister Ashwini Vaishnaw said. The government and Life Insurance Corporation of India will retain a combined 34% stake in the restructured entity. Vaishnaw called it India’s largest financial-sector FDI.

The Union Cabinet on Wednesday approved the sale of a 60.72% stake in IDBI Bank to Fairfax Financial Holdings’ subsidiary, M/s 10955230 Canada Inc., for Rs 52,878.08 crore, paving the way for a major restructuring of the lender. The Cabinet Committee on Economic Affairs ( CCEA ) approved the Canadian entity as the strategic buyer, according to an official press note. The transaction involves the sale of the government’s 30.48% stake and Life Insurance Corporation of India’s ( LIC ) 30.24% holding in IDBI Bank. Following the proposed transaction, the government will retain a 15% stake and LIC 19%, taking their combined holding to 34%.

Once completed, the transaction will be the largest foreign direct investment ( FDI ) in India’s financial sector , Union Minister Ashwini Vaishnaw said.

The strategic sale followed a two-stage competitive bidding process overseen by a multi-layered decision-making mechanism comprising the Inter-Ministerial Group, the Core Group of Secretaries on Disinvestment and an empowered group of Cabinet ministers. The government issued a preliminary information memorandum inviting expressions of interest on October 7, 2022. Five parties initially submitted expressions of interest, of which four qualified under the prescribed eligibility criteria.


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