Cabinet approves strategic restructuring of IDBI Bank
New Delhi: The Union Cabinet on Wednesday approved the strategic restructuring of IDBI Bank, clearing the sale of a 60.72% stake to Canada’s Fairfax Financial Holdings for Rs 52,878 crore.
The Cabinet Committee on Economic Affairs (CCEA), headed by Prime Minister Narendra Modi, approved M/s 10955230 Canada Inc, whose parent is Fairfax Financial Holdings, as the strategic buyer at Rs 81 per share.
With the transaction, the government’s stake in the bank will fall to 15% from 45.48% and Life Insurance Corporation of India’s (LIC) stake will come down to 19% from 49.24%. The government will divest 30.48% and LIC will divest 30.24%.
Briefing the media, Information and Broadcasting Minister Ashwini Vaishnaw said the government and LIC will together retain a 34% stake in the restructured entity.
In its release, the government termed the deal as a strategic restructuring rather than strategic disinvestment. Finance Minister Nirmala Sitharaman said the government will remain invested in IDBI Bank.
The government said once completed, this will be the largest foreign direct investment (FDI) in the financial sector in India’s history and the country’s biggest strategic disinvestment since the sale of Air India.
The deal is expected to be completed before the end of the current fiscal and is subject to RBI’s fit and proper assessment and other regulatory approvals.
