Cabinet approves IDBI Bank sale to Fairfax arm; 60.72% stake to be sold for ₹52,000 crore

The Union Cabinet on Wednesday approved the strategic sale of IDBI Bank to a Fairfax Group entity for around ₹52,000 crore. Union Minister Ashwini Vaishnaw said the Cabinet Committee on Economic Affairs (CCEA) has cleared the transaction, calling it one of India’s largest foreign direct investment (FDI) deals in the financial services sector.

The proposed transaction involves the sale of a combined 60.72% stake held by the Government of India and the Life Insurance Corporation of India (LIC).

Canada-based Fairfax Financial Holdings will acquire the stake through its subsidiary, 10955230 Canada Inc., Vaishnaw said. The deal, subject to the requisite regulatory approvals, would rank among India's largest FDI transactions once completed.

Founded in 1985, the Toronto-headquartered Fairfax Financial s a financial services group led by Indian-born investor Prem Watsa, with interests in property and casualty insurance, reinsurance and investment management.

Govt, LIC to retain minority stakes

The government will divest 30.48% of IDBI Bank’s equity, while LIC will sell 30.24%, transferring majority ownership and management control to the strategic buyer.

The Centre currently holds a 45.48% stake in IDBI Bank, while LIC owns 49.24%, taking their combined shareholding to around 94.72%. Following the proposed divestment, the government’s stake is expected to decline to approximately 15% and LIC’s holding to around 19%, subject to the final transaction structure.

The expression of interest for the stake sale was issued in October 2022, while financial bids were submitted on February 6, 2026. Fairfax Financial Holdings and Emirates NBD were among the leading contenders during the bidding process.

Govt raises ₹55,700 crore via disinvestment in FY27

The government raised ₹55,700 crore through strategic disinvestment during the first five months of FY27, from April to August 2026, equivalent to 70% of its annual target. This compares with an average of 33% of the annual target achieved during the corresponding period across FY20-FY26.

Disinvestment activity has gained momentum after the government fell short of its budgeted target for seven consecutive financial years, from FY20 to FY26.

Ahead of the announcement, IDBI Bank shares closed 9.07% higher at ₹90.44 on the BSE, valuing the lender at ₹97,244.73 crore.