More Than 10,000 IDBI Bank Employees Strike Over 60.72% Sale to Fairfax
Key Facts
Employees and officers at India’s IDBI Bank ended a two-day nationwide strike on November 3 over the sale of a majority stake to Fairfax Financial, in a move organizers said involved more than 10,000 employees across more than 2,000 branches. The proposed deal targets the sale of 60.72% of the bank, while labor opposition raises questions about the valuation of its assets and its institutional prospects. Strike organizer Davidas Tuljapulkar said the forum would decide its next step at a meeting of its core committee on November 10. He added that the union was seeking to prevent the stake sale. The forum is considering a request for support from the United Forum of Bank Unions, including the possibility of calling a nationwide strike.
The forum’s objection focuses on what it sees as the risk that the deal would undervalue the bank. In a statement, it said the transaction could reduce the value of IDBI’s properties, institutional capabilities, customer relationships, future earnings and strategic importance. The statement said: "We are deeply concerned that the deal could reduce the value of IDBI’s properties, institutional capabilities, customer relationships, future earnings and strategic importance." The forum also called for a transparent review of the buyer’s ownership structure, financial strength and regulatory record. The objection puts the valuation method and terms for selecting the investor at the center of the dispute between employees and the government over the sale.
India’s finance ministry provided details of its valuation methodology in response to the debate over the deal’s value. It said the institution’s fair value was determined using two alternative methods: market multiples and asset valuation, with two independent agencies conducting the assessments. The average of the two valuations was 75.99 rupees per share, which the ministry used as a benchmark to assess eligible bids. It said Fairfax’s winning bid exceeded both the benchmark and the fair-value estimates. The ministry also said the net asset valuation took into account tangible and intangible assets, including land and property, as well as liabilities, based on audited accounts as of March 31, 2026.
According to the ministry, the total consideration for the deal was 52,878.0806181 crore rupees. Fairfax said its bid was 81 rupees per share, a premium of about 23% to the bank’s book value on June 30, 2026. In contrast, IDBI shares traded between 61.01 and 118.38 rupees during the valuation period, which the ministry described as volatility in a thinly traded stock. It said fluctuations above and below the offer price led it to exclude the market price from determining intrinsic value and rely on a comparison of market multiples. These figures distinguish the benchmark price the government used to assess bids from the offer price announced by Fairfax.
Fairfax’s selection followed a competitive process in which five parties expressed initial interest, four qualified, and two then submitted final technical and financial bids, according to the finance ministry. After the proposed sale, the Indian government will retain a 15% stake, while LIC will retain 19%. The ministry said both entities would relinquish their board representatives and become public-sector shareholders. This means the proposed deal transfers the majority stake to the buyer while leaving two public-sector shareholders in the bank. The sale has not yet been completed and remains subject to further steps and required approvals.
Fairfax’s plan includes expanding the bank’s business alongside insurance and investment activities. The company said it intends to contribute its stakes in Go Digit Life and Go Digit General Insurance, as well as its stake in IIFL Capital, to IDBI Bank. Fairfax Chairman Prem Watsa said the idea was to bring together a bank, an insurance company and an investment and wealth management services provider in the Indian market. The company said, however, that its selection as strategic buyer did not represent the final stage of the sale process and that no definitive binding agreements had yet been signed. It added that completion of the purchase and proposed contributions was conditional on government and regulatory approvals, as well as approvals from shareholders, creditors and other parties.
Approval from the Reserve Bank of India is among the next steps in the deal process. The finance ministry said the winning bidder would present its qualifications to the RBI under a fit-and-proper assessment and submit a roadmap for complying with regulatory conditions. On political opposition, the Congress party called for the sale of the bank to a foreign company to be halted and for a joint parliamentary committee to investigate the process. Jairam Ramesh described the deal as an alleged scandal, PTI reported. In Mumbai, IDBI shares fell 2.1% on Monday, November 2, while the Nifty 50 index rose 1.7%; the moves came a day before the strike ended.
An official with the Department of Investment and Public Asset Management said the strategic buyer could not change employees’ service conditions to their detriment and that pension obligations would continue. Reuters quoted the official as saying the share purchase agreement barred the buyer from changing workers’ service conditions in a way that harmed them. The commitment comes amid the forum’s concerns about the bank’s future, capabilities and customer relationships. The union’s next move will become clear after the November 10 meeting, which may consider a broader federation’s support and the possibility of a nationwide strike. Meanwhile, the sale’s progress depends on completing agreements and obtaining regulatory and government approvals, as well as approvals from shareholders and creditors.