Fairfax Financial Acquires Controlling Stake in IDBI Bank
Fairfax Financial Holdings is acquiring a 60.72% stake in IDBI Bank for ₹52,878 crore, marking the largest foreign direct investment in India's financial sector.
The Government of India and the Life Insurance Corporation of India (LIC) have approved the sale of a combined 60.72% stake in IDBI Bank to Canada-based Fairfax Financial Holdings for approximately ₹52,878 crore. The transaction involves the government divesting 30.48% and LIC divesting 30.24%, with the government retaining a 15% stake and LIC holding 19%. The deal, priced at ₹81 per share, represents the largest foreign direct investment in India's financial sector and the biggest strategic disinvestment since the privatization of Air India.
Finance Minister Nirmala Sitharaman characterized the move as a strategic restructuring intended to enable the bank's next growth phase. The sale follows a significant financial recovery for IDBI Bank, which reported a record net profit of ₹9,513 crore for the fiscal year ended March 2026. The windfall provides critical fiscal relief for the Indian government amid geopolitical volatility and rising crude oil prices, pushing total disinvestment proceeds for FY27 past ₹1 lakh crore.
To comply with Reserve Bank of India rules prohibiting the ownership of two separate banks, Fairfax must either merge its existing 40% stake in CSB Bank with IDBI Bank or sell the CSB stake within two years. Additionally, Fairfax plans to create a unified financial services entity by combining IDBI Bank with Digit Insurance and IIFL Capital to offer a one-stop solution for banking, insurance, and wealth management. The deal remains subject to regulatory clearances, including a fit-and-proper assessment by the Reserve Bank of India.
