CORPORATE
Fairfax to acquire 60% of IDBI Bank in largest foreign investment in financial services
- IBJ Bureau
- Oct 15, 2026
The Union Cabinet has approved the sale of a 60.72 per cent stake in IDBI Bank to Canada Inc, an entity of Fairfax Financial Holdings, clearing a key step in the lender’s strategic restructuring.
At Rs 52,878 crore, the Fairfax-IDBI deal is the largest foreign investment in the Indian financial services sector.
The government will sell a 30.48 per cent stake, while Life Insurance Corporation of India (LIC) will divest 30.24 per cent, according to the Department of Investment and Public Asset Management (DIPAM).
The government and LIC will together retain a 34 per cent holding in the restructured entity, Union Minister Ashwini Vaishnaw has said while announcing the decision.
The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has concluded the sale process spanning over five years.
The decision marks a major step in the government’s efforts to reduce its stake in State-owned assets and bring in private investment into the financial sector.
The share purchase agreement is expected to be signed and executed before the end of 2026, DIPAM Secretary Arunish Chawla has said.
Under the agreement, the buyer’s invested capital will remain locked in for three years.
IDBI Bank will also retain its existing brand name following the transaction, Mr Chawla has added.
LIC will be required to bring down its stake in IDBI Bank to 15 per cent within two years in line with Reserve Bank of India norms.
The winning bid was above the benchmark price of Rs 75.99 per share used to evaluate qualified bids, the DIPAM secretary has said.
Fairfax will have to make an open offer to IDBI Bank’s minority shareholders.
Since Fairfax already holds a stake in CSB Bank, it must either merge CSB with IDBI Bank or exit its investment within two years.
The RBI norms bar a single entity from being a promoter of or holding a controlling stake in two or more banks.
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