New Delhi: IDBI Bank’s strategic stake sale is expected to conclude by the end of FY27, subject to Reserve Bank of India approval, DIPAM Secretary Arunish Chawla told PTI. The transaction would bring Fairfax Financial Holdings into the lender as its strategic buyer.
RBI Clearance Before Share Purchase Agreement
The successful bidder must submit technical documents and credentials to the RBI, including information required for additional regulatory compliance. Once clearance is secured, the parties will sign the share purchase agreement, enabling completion before the financial year ends.
The government has approved the sale of a combined 60.72 per cent stake to Canada’s Fairfax for approximately ₹53,000 crore. The transaction covers a 30.48 per cent government holding and LIC’s 30.24 per cent stake.
Fairfax, led by Canadian billionaire Prem Watsa, will pay ₹81 per share, exceeding the ₹75.99 benchmark fair value determined by two independent valuation agencies.
Open Offer To Protect Minority Shareholders
Chawla said minority and retail shareholders’ interests would be protected. After signing the agreement, the strategic buyer must launch an open offer, allowing eligible minority shareholders to tender their holdings under applicable regulations.
He also said the market regulator has directed LIC to lower its remaining holding from 19 per cent to 15 per cent after divestment. This would expand public float by four percentage points, increasing shares available to public investors.
Employee Service Conditions To Remain Protected
Addressing workforce concerns, Chawla assured that existing employees’ service conditions would remain protected. He described IDBI Bank as a banking company being restructured as a going concern.
The proposed transaction represents a major step in India’s banking privatisation programme. The sale process began in 2022 and encountered difficulties earlier this year when initial bids failed to meet the government’s reserve price.
Chawla described the restructuring as the biggest strategic transaction, with substantial foreign investment expected. Completion nevertheless remains conditional on regulatory clearance and subsequent execution of the final transaction documents.
