India’s Finance Ministry defended the review of a proposed 60.72% sale of IDBI Bank, saying officials used delegated authority and independent valuations to assess confidential bids.
In a clarification posted Oct. 29, the ministry said the Cabinet Committee on Economic Affairs (CCEA) had delegated authority to the Core Group of Secretaries on Disinvestment under a decision approved Aug. 16, 2017. That authority included consideration of procedural deviations in strategic disinvestment transactions. For the initial round in fiscal 2025-26, the ministry described departmental guidance as indicative rather than mandatory.
Bidders submitted confidential offers after preparing their own valuations, the ministry said. Two independent agencies assessed the bank separately, using the Market Multiple Method and Asset Valuation Method, according to the ministry’s FAQ. Their average valuation was ₹75.99 per share; the CCEA said the accepted bid of ₹81 per share exceeded that average and both individual estimates. The ministry said the agencies’ names were covered by confidentiality guarantees.
The pricing references concern different stages of the process. The CCEA said the initial round had a reserve price of ₹94.42 per share and that bids fell short. Qualified bidders were later invited to submit sealed best offers in fiscal 2026-27. The Finance Ministry said the reserve price was unchanged, but did not give a second-round figure. Its FAQ identifies ₹75.99 as the average valuation benchmark; public statements do not explain how that benchmark relates to the reserve price.
The CCEA approved 10955230 Canada Inc., a subsidiary of Fairfax Financial Holdings Limited, to acquire 60.72% of IDBI Bank. The CCEA set the consideration at ₹52,878.0806181 crore, while Fairfax described it as about US$5.6 billion. The Government of India is selling 30.48% and Life Insurance Corporation of India (LIC) 30.24%; they would retain 15% and 19%, respectively. EconoTimes previously covered the CCEA’s approval of the buyer.
Fairfax said in an Oct. 14 filing with the U.S. Securities and Exchange Commission that, as of that date, no binding definitive agreements had been entered into for either the bank purchase or the proposed contribution transactions. The CCEA says the buyer must present its credentials to the Reserve Bank of India under the fit-and-proper process used at the expression-of-interest stage and provide a roadmap for meeting regulatory conditions.
