The Indian government revealed plans to sell a 60.7% stake in IDBI Bank to Canadian firm Fairfax Financial Holdings for more than 529 billion rupees ($5.5 billion). This transaction, pending final approvals, will be the largest foreign direct investment in India's financial sector.
The Ministry of Finance highlighted the bank's poor financial health, necessitating repeated capital infusions, which led to the decision to sell to a strategic buyer. The average fair value of IDBI shares was determined to be 75.99 rupees, while Fairfax's bid was 81 rupees per share, higher than IDBI's closing price of 90.39 rupees on the previous day.
Finance Minister Nirmala Sitharaman emphasized that this investment would support the bank's growth and reflect India's strong economic resilience. The government has been actively divesting stakes in various state-owned companies to address fiscal pressures, having previously raised $3.3 billion from a stake sale in Life Insurance Corporation of India earlier this year