A workers' union at IDBI Bank called a two-day nationwide strike on Sunday against the sale of the state-owned lender to Canada's Fairfax Financial Holdings.
By the numbers: Fairfax has offered 81 rupees a share for more than 60% of IDBI Bank, a roughly $5.5 billion deal, against an average fair value set at 75.99 rupees; the stock opened near 79 rupees on Monday.
Zoom in: The United Forum of IDBI Officers and Employees demanded that the government cancel the privatization process and raised what it called grave concerns about the transparency of the sale and valuation.
What they're saying: Rahul Gandhi, India's leader of the opposition, said: "Public banks are not assets to be sold off, they are tools to build the nation."
- Gandhi said selling more than 60% of IDBI breaks earlier governments' commitment to keep a 51% stake in the lender.
The other side: Finance Minister Nirmala Sitharaman said the bank reached the government in poor shape and was revived through professionalism, prudence and more than 250 billion rupees, about $2.6 billion, of recapitalization.
- "The IDBI Bank is now poised for its next phase of growth," Sitharaman said, and the government has said that phase will be driven by a strategic investor.
Yes, but: Indian outlet Businessworld reported on Thursday that officials suppressed IDBI's valuation to make the Fairfax bid look attractive, and the finance ministry says the bidding was double blind, with bidders and valuers kept apart.
The big picture: India called the sale the largest foreign direct investment transaction in its financial sector, and New Delhi has been selling stakes all year, taking $3.3 billion in August for 6.5% of Life Insurance Corporation.
Why it matters: A government under fiscal pressure is testing how much of a state bank it can hand to a foreign buyer, and the answer sets the price for every privatization India attempts next.
