Home / Business and Economy / India's Biggest Bank Deal: Fairfax Secures IDBI Stake
India's Biggest Bank Deal: Fairfax Secures IDBI Stake
15 Jul
Summary
- Fairfax Holdings improved its offer to ₹81 per share for IDBI Bank.
- The deal values IDBI Bank at ₹53,000 crore, a record foreign investment.
- The transaction requires approvals from RBI, CCI, and other regulators.
Fairfax Holdings is poised to secure a major stake in IDBI Bank after submitting an improved offer of ₹81 per share. This revised bid is higher than its previous offer of ₹75 per share made last year.
The government and LIC are selling their combined stakes, with the deal projected to yield approximately ₹53,000 crore. This value makes it the largest foreign investment into an Indian bank, surpassing previous records.
The successful bidder, Fairfax Holdings, will also be required to make an open offer to public shareholders. The transaction is subject to numerous approvals, including from the Reserve Bank of India and the Competition Commission of India (CCI).
IDBI Bank was designated a private sector bank in 2019 when LIC acquired a controlling stake. The bank's shares have seen a significant increase of nearly 42% since hitting a 52-week low in March. Prior to this, the sale process was suspended in March due to bids falling below the reserve price.
Fairfax's Indian unit, CSB Bank, currently holds a 40% stake. The promoters may need to merge these two banks, though the RBI could grant an extended timeframe for this. Emirates NBD had previously bid for IDBI Bank but the process was halted.
