Five deals worth Rs 1.37 lakh crore have been stitched in the Indian financial sector over the past year.

The biggest is the proposed 60.72% stake sale of IDBI Bank for Rs 52,878 crore to Prem Watsa-controlled Fairfax Financial Holdings, approved by the Union Cabinet on Wednesday. Valued at around $5.5 billion, this is India’s largest foreign direct investment (FDI) in the financial sector.

The government and state-run Life Insurance Corporation of India (LIC) will sell 30.48% and 30.24% stake, respectively. They will continue to hold 34% stake in IDBI Bank.

In June last year, Dubai-based Emirates NBD invested Rs 26,850 crore to take 60% of RBL Bank.

Japan's Sumitomo Mitsui Banking Corporation (SMBC) acquired an initial 20% stake in Yes Bank for around Rs 13,483 crore.

While these three deals are in the banking sector, Japan’s Mitsubishi UFJ Financial Group (MUFG) acquired 20% stake in non-bank lender Shriram Finance for around Rs 39,620 crore.

Manappuram Finance sold 18% stake to private equity firm Bain Capital for Rs 4,385 crore.

The deals in the banking sector have come on the back of cleaner balance sheets, stronger capitalisation, lighter non-performing assets (NPAs) and better governance standards. The lenders have turned around after being in trouble and valuations of the mid-sized lenders have been attractive compared to their long-term proposition.