New Delhi, October 15: The Cabinet Committee on Economic Affairs (CCEA) has approved Prem Watsa-led Fairfax Financial Holdings’ bid to acquire a 60.72% controlling stake in IDBI Bank for ₹52,878 crore ($5.56 billion). Under the terms, Fairfax will acquire a majority stake at a bid price of ₹81 per share, higher than the ₹75.99 benchmark determined by two independent valuation agencies, an official statement said.
This divestment involves a 30.48% stake sale by the Government of India while the LIC will sell another 30.24% in the bank. After the deal, both entities will be left with about 34% in the Bank.
For the Indian banking sector, this represents a watershed moment, after UAE-based Emirates NBD acquired 60% in RBL Bank for $3 billion in June 2026, and Japan-based MUFG Bank acquired a 20% stake in Shriram Finance for $4.4 billion earlier in April. This deal would be the largest foreign investment in an Indian bank to date, after Fairfax secures the necessary regulatory approvals from the RBI and other agencies.
At a time when foreign investors are exiting Indian equities in droves, this interest in banks comes as credit growth remains strong, with defaults under 3% compared to other emerging markets and strong repayment discipline.
The government has been looking to divest its stake in IDBI Bank since 2022, with plans being shelved due to lower prices quoted by suitors. The lender has total assets worth $46.66 billion, with more than 2,000 branches across the country in retail and institutional segments. The bank has seen a remarkable turnaround, with its bad loan ratio dropping from 32% in September 2018 to 2.3% in June 2026.
Fairfax Financial already has exposure to the Indian financial markets through a stake in Kerala-based CSB Bank, and it will have to decide whether to merge it with IDBI Bank or divest it, as per RBI rules.
