Fairfax Holdings Finalised For IDBI Bank Stake In ₹53,000 Crore Deal

The government has selected Fairfax Holdings as the buyer for its stake in IDBI Bank after the Canadian firm raised its offer to ₹81 per share from ₹75 last year.

The combined stake sale by the government and Life Insurance Corporation's (LIC) is expected to be worth around ₹53,000 crore ($5.5 billion). If completed, it would become the largest foreign investment in an Indian bank, surpassing Emirates NBD's $2.75 billion deal for a 60% stake in RBL Bank in 2025.

At 3:15 PM today, IDBI Bank shares jumped 0.07% to ₹86.60.

How The Deal Breaks Down

• Fairfax offer price: ₹81 per share

• Government stake being sold: 30.48% of IDBI Bank

• Government proceeds: Approximately ₹26,620 crore

• LIC stake being sold: 30.24%

• LIC proceeds: Approximately ₹26,440 crore

• Combined stake being sold: 60.72%

• Total deal size: ₹53,000 crore or $5.5 billion

• Open offer: Fairfax will also need to make an open offer to public shareholders

What Happens Next

A formal notification is expected shortly, followed by a letter of intent and then a share purchase agreement. Fairfax must clear a Reserve Bank of India fit-and-proper assessment before the transaction can be completed. Approvals will also be required from statutory and regulatory authorities, including the Competition Commission of India (CCI).

One complication involves Fairfax's existing Indian banking presence. Its Indian unit currently holds a 40% stake in CSB Bank. A banking sector executive said the two banks will likely need to be merged, though the Reserve Bank of India may allow an extended timeframe for that process.

IDBI Bank responded to a Bombay Stock Exchange (BSE) query on Tuesday, saying it was not in a position to confirm or deny the news.

The Background

The IDBI Bank privatisation saga stretches back to May 2021, when the Cabinet Committee on Economic Affairs gave in-principle approval for strategic disinvestment. In 2023, both the government and LIC decided to offload just over 30% each.

Both Fairfax and Emirates NBD submitted financial bids in February 2026, but the process was suspended in March when offers came in below the undisclosed reserve price. Fairfax's revised offer at ₹81 per share has cleared that hurdle.

IDBI was designated a private sector bank in 2019 after LIC acquired a controlling 51% stake for ₹21,624 crore. The government and LIC together hold over 94% of the bank.

The deal contributes to the government's ₹80,000 crore asset monetisation target for this fiscal year. The government has so far raised approximately ₹20,272 crore through stake sales in various companies.

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