Cabinet approves Fairfax's ₹52,878-crore bid for IDBI Bank; largest FDI ever in India's financial sector

The Union Cabinet on Wednesday approved the strategic sale the sale of a 60.72% stake in IDBI Bank to Fairfax Financial Holdings for ₹52,878 crore.

The government and Life Insurance Corporation of India (LIC) will jointly retain a 34% stake in the restructured entity.

The transaction involves the sale of 30.48% stake held by the government and 30.24% held by LIC.

"Once completed, this will be the largest FDI in the financial sector of our economy so far," the government said in a statement.

Union Minister Ashwini Vaishnaw said the restructuring would bring fresh capital into the financial services sector and open up investment opportunities as India seeks funds to support its economic expansion.

"As India continues to grow at a rapid pace, there is a significant need for growth capital," Vaishnaw said at a Cabinet briefing.

"A substantial amount of capital will be required in the coming years, and many growth opportunities are emerging," he said.

The proposed sale of a combined 60.72% stake held by the government and LIC would transfer control of the lender to Fairfax.

"The CCEA ...approved M/s 10955230 Canada Inc (parent entity M/s Fairfax Financial Holdings Ltd) as the strategic buyer for this transaction for a purchase consideration of Rs 52,877.07 crore for the acquisition of 60.72 per cent stake in IDBI Bank, comprising 30.48 per cent equity held by the GoI and 30.24 per cent by the LIC," the statement said.

The successful bidder offered ₹81 per share, above the benchmark price of ₹75.99 determined by two independent valuation agencies, the ministry said.

The government said the stock market price of IDBI Bank was not considered an appropriate indicator of its intrinsic value because the shares were thinly traded and volatile during the valuation period.

The stock traded in a range of ₹61.01 to ₹118.38 per share during the period, while the price stood at ₹70.38 on May 18, 2026, the last trading day before invitations for best-offer bids were issued.

The CCEA has also delegated powers to an empowered group of Cabinet ministers to undertake the sale of the government's residual 15% stake through the open market in accordance with the prescribed procedure.

LIC will be free to manage its remaining 19% stake under its internal procedures, subject to regulatory directions.

Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla said the deal will be completed before the end of the current fiscal.

Fairfax will have to also make an open offer to the minority shareholders.