The Indian government has approved the sale of a majority stake in IDBI Bank to Canada’s Fairfax Financial Holdings in a transaction valued at ₹52,878.08 crore ($5.56 billion). Announced the deal will see the Fairfax-backed entity acquire a 60.72% stake in the bank, marking India’s largest cross-border banking deal.
The Cabinet Committee on Economic Affairs (CCEA) approved the strategic buyer for the transaction. The sale involves a 30.48% stake held by the Government of India and a 30.24% stake held by the state-run Life Insurance Corporation of India (LIC). The approved buyer is 10955230 Canada Inc., whose parent entity is Fairfax Financial Holdings Ltd.
Fairfax will pay ₹81 per share, above the government’s benchmark price of ₹75.99 per share. According to the government’s statement, the winning bid was higher than the benchmark price and the fair value estimates provided by two independent valuation agencies. The offer was therefore considered reasonable and approved.
Following the transaction, the government will retain a 15% stake in IDBI Bank, while LIC will continue to hold 19%. Both shareholders will withdraw their nominees from the bank’s board and become public shareholders. The government has also authorised the Alternative Mechanism to undertake the sale of its remaining 15% holding through the open market, in line with the applicable procedure. LIC will manage its residual stake under its internal procedures and regulatory requirements.
The transaction is subject to approval from the Reserve Bank of India (RBI). The successful bidder must present its credentials to the central bank under the required fit-and-proper assessment process and submit a roadmap for complying with the prescribed regulatory conditions. The government has described the transaction as the largest foreign direct investment in India’s financial sector to date.
The sale process has been underway for more than four years. The government first announced plans to sell its stake in IDBI Bank in 2022. The process was put on hold in March after bids fell short of the government’s price expectations and was subsequently restarted following a reassessment of its valuation expectations.
IDBI Bank’s financial position has improved significantly in recent years. Its gross non-performing asset ratio declined from nearly 32% in September 2018 to 2.3% as of June 2026. The bank had total assets of ₹4.44 trillion ($46.66 billion) as of June 2026 and operated more than 2,000 branches across India.
The acquisition comes amid increased foreign investment in India’s financial sector, supported by credit demand and relatively low loan delinquencies. Recent transactions include Emirates NBD’s proposed $3 billion investment in RBL Bank, Sumitomo Mitsui Banking Corporation’s acquisition of a 20% stake in Yes Bank, and MUFG’s acquisition of a 20% holding in Shriram Finance for $4.4 billion.
The IDBI Bank transaction forms part of the government’s broader disinvestment programme, announced in 2021, to privatise selected state-owned enterprises. The government expects the change in ownership to reduce the bank’s dependence on government support and create scope for private capital, technology and management practices to support its future growth.
