Rs 53k crore IDBI stake sale with LIC takes government past selloff target
The Indian government and LIC are selling a 60.7% stake in IDBI Bank to Fairfax Financial Holdings for approximately Rs 53,000 crore. This strategic restructuring marks the largest financial sector foreign direct investment in India and helps the government meet its annual disinvestment targets.
Why it matters
This deal represents a significant shift in India's banking sector privatization efforts and highlights the growing role of foreign institutional investors in domestic financial institutions.
NEW DELHI: Govt and LIC will sell a combined 60.7% in IDBI Bank for Rs 52,878 crore to an arm of Fairfax Financial Holdings, which is controlled by Canadian billionaire Prem Watsa, that will result in the largest-ever financial sector FDI in the country. The transaction will help govt scale the disinvestment and asset monetisation target of Rs 80,000 crore for the current fiscal year.The Centre will sell 30.48% to 10955230 Canada Inc, while LIC will offload 30.24% after the cabinet committee on economic affairs cleared the transaction on Wednesday, five years after the process started and seven months after the earlier bids by Fairfax and Emirates NBD were rejected. Finance minister Nirmala Sitharaman said that the "strategic restructuring" - as opposed to strategic sale - will result in govt retaining a 15% stake.
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