The Union Cabinet has approved the sale of a 60.72% stake in IDBI Bank to Fairfax for ₹52,877 crore, handing operational control to the Canadian investor while the government and LIC retain a minority holding.
India’s long-running effort to sell a controlling stake in IDBI Bank has moved close to completion after the Union Cabinet approved the transfer of 60.72% of the lender to Fairfax Financial Holdings for ₹52,877 crore. The deal, which combines a 30.48% holding from the government and a 30.24% stake from Life Insurance Corporation of India, is the biggest strategic disinvestment since Air India’s privatisation, according to Livemint, the Financial Express and other reports.
Officials said the transaction should be wrapped up before the end of the current calendar year, subject to the remaining regulatory clearances and execution of the share purchase agreement. The government and LIC are expected to retain a combined 34% interest in the restructured bank, preserving a minority position while handing operational control to the buyer, according to the reports.
Finance Minister Nirmala Sitharaman used the development to underline the government’s wider reform agenda. Asked whether the IDBI sale could become a template for further bank privatisation, she said on X: “Having supported the bank’s recovery, we are now enabling its next phase of growth through the infusion of Foreign Direct Investment while retaining a minority stake. This will not only strengthen the banking ecosystem but also help banking services surpass global benchmarks. It reinforces that India’s growth story is strong, its economy is resilient, and the government’s commitment to reform is unwavering,”
The sale has been nearly five years in the making. According to the lead article, the preliminary information memorandum inviting expressions of interest was issued on October 7, 2022, after the process had already been under way for years and had moved through a series of regulatory and procedural steps.
The timing also matters for the public finances. The government is facing elevated subsidy costs and uneven revenue trends, and the deal is expected to bring in about ₹26,000 crore for the Centre. Even so, officials said the transaction is not being driven by short-term fiscal pressures or the wider geopolitical backdrop. For the Department of Investment and Public Asset Management, the sale would lift disinvestment receipts and PSU dividends closer to its ₹80,000 crore target for the financial year, while marking the latest step in the Centre’s broader effort to reduce its direct role in banking.
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