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) approved the sale of a combined 60.72% stake in IDBI Bank to Canada-based Fairfax Financial Holdings for ₹52,878 crore. The transaction, priced at ₹81 per share, involves the government divesting 30.48% and LIC divesting 30.24%. Together, the government and LIC will retain a 34% minority interest, with the government holding 15% and LIC holding 19%.
This deal represents the largest foreign direct investment in India's financial sector and the biggest strategic disinvestment since the privatization of Air India. The windfall provides critical fiscal relief for the Indian government amid high crude oil prices and a sliding rupee, pushing FY27 disinvestment proceeds past the ₹80,000 crore budget target. The sale follows a significant recovery for IDBI Bank, which reported a record net profit of ₹9,513 crore for the financial year ended March 2026.
Fairfax Financial plans to transform IDBI Bank into a diversified financial services group by consolidating its holdings in Go Digit insurance and IIFL Capital Services under the bank's umbrella. 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 divest the CSB stake within two years. The transaction is subject to regulatory clearances and is expected to close by early 2027.
