India Approves Fairfax’s $6.3 Billion IDBI Bank Deal

India’s Cabinet Committee on Economic Affairs approved the sale of a 60.72% controlling stake in IDBI Bank to Fairfax Financial Holdings for ₹52,878.08 crore, but the transfer remains subject to regulatory and other conditions. Fairfax’s wholly owned subsidiary, 10955230 Canada Inc., was selected as the buyer for shares held by the central government and Life Insurance Corporation of India. The approval was given on October 14. The proposed sale covers the government’s 30.48% stake and LIC’s 30.24% holding. The approved offer is ₹81 per share, about 10.4% below IDBI Bank’s Wednesday closing price of ₹90.44. If completed, the government is expected to retain 15% of the bank and LIC 19%, leaving the two with a combined 34% stake. IDBI Bank shares fell sharply in intraday trading on October 15, after rising nearly 9% the previous day. Reports put the intraday decline at as much as 6.3% and 7.8%. The decline followed the rally and came as the offer price was below the previous close; explanations that investors were taking profits are analytical interpretations, not confirmed causes.