Fairfax Subsidiary Approved as Strategic Buyer for 60.72% IDBI Bank Stake

India approved Fairfax subsidiary 10955230 Canada Inc. as the strategic buyer for the proposed 60.72% IDBI Bank stake sale, valued at about $5.6 billion.

The proposed price is 81 rupees per share, totaling 528.78 billion rupees. The Government of India is selling a 30.48% stake, while Life Insurance Corporation of India is selling 30.24%.

The Reserve Bank of India (RBI) must receive the buyer’s credentials for a “Fit & Proper” assessment, along with a regulatory compliance roadmap. Fairfax also proposes contributing its interests in Digit and IIFL Capital to IDBI Bank at their respective market prices. Those contributions require approval from the RBI and other regulators; Digit’s contribution also needs approval from India’s insurance regulator.

No binding definitive agreements have been signed for the stake purchase or the proposed contributions. The bank acquisition could proceed without either or both contributions.

If the transactions are completed, Fairfax expects IDBI Bank Managing Director and CEO Rakesh Sharma to continue leading the bank. Any proposed leadership appointments would require central bank approval.

Fairfax Chairman and CEO Prem Watsa said the company was “very excited to be selected by the Government of India to be the purchaser of the Government’s interest in IDBI Bank.”