Currently, the Centre holds 45.48 per cent while holds 49.24 per cent in IDBI Bank Post Fairfax tarnsaction,the Centre will hold 15 per cent while LIC will have a stake of 19 per cent. The government has also authorised the sale of the government’s remaining 15 per cent shareholding through the open market. LIC will be free to manage its residual 19 per cent stake in accordance with its internal procedures and regulatory requirements.
Fairfax owns re/insurance joint ventures including Digit General Insurance,Digit Life Insurance,and Valueattics Reinsurance Company in India
New Delhi: The Union Cabinet has approved the strategic sale and restructuring of IDBI Bank to Fairfax Financial Holdings.owned by Indian born Canadian citizen Prem Watsa, for Rs 52,878 crore.
It will acquire a controlling 60.72 per cent stake in the bank.
Fairfax will pay Rs 81 per IDBI share and will acquier 60.72 per cent of the stake.
Union Minister Ashwini Vaishnaw said the move will bring fresh capital into the financial services sector, boost FDI, and create new growth opportunities for MSMEs, small industries, and entrepreneurs.
The Government of India and LIC will jointly retain a 34 per cent stake in the restructured entity post Fairfax tarnsaction.
Currently, the Government of India and LIC together hold a combined 94.72 per cent stake in IDBI Bank.The Centre holds 45.48 per cent while LIC holds 49.24 per cent.
Post Fairfax tarnsaction,the Centre will hold 15 per cent while LIC will have a stake of 19 per cent.Currently, IDBI Bank is the largest bancassurance partner of LIC.
The Cabinet has also authorised the sale of the government’s remaining 15 per cent shareholding through the open market. LIC will be free to manage its residual 19 per cent stake in accordance with its internal procedures and regulatory requirements.
The transaction, valued at more than $5 billion, would be the largest foreign investment in an Indian bank.
According to a Finance Ministry press note on the strategic restructuring, the government will sell its 30.48 per cent stake, while LIC will divest 30.24 per cent. Following the transaction, the government will retain 15 per cent and LIC will hold 19 per cent, taking their combined shareholding to 34 per cent.
Vaishnaw said retaining a minority stake would allow the government and LIC to benefit from the bank’s future growth.
Highlighting the significance of the deal, Vaishnaw said, “This partnership will facilitate the infusion of new capital and pave the way for the largest FDI inflow into India’s financial services sector.”
It is also important for the government at a time when the Middle East war has strained finances and weaker foreign inflows have pressured the rupee, said analysts.
Fairfax also owns about 40 per cent of smaller lender CSB Bank.Under Reserve Bank of India (RBI) rules, an entity cannot own and operate two separate banks.
The Canadian investor is likely to be given up to two years to either sell its stake in CSB Bank or merge it with IDBI Bank, sources said.
In June this year, the government had received revised bids from Fairfax and Emirates for the IDBI stake after lowering the reserve price for the sale.
Fairfax has been a major investor in India through Fairfax India Holdings Corporation, which had assets worth $3.8 billion as of June 30, 2026.
Its other investments include non-bank lender IIFL Capital online brokerage firm 5paisa, two insurance joint ventures and one reinsurance ventures. The re/insurance companies are Digit General Insurance,Digit Life Insurance,Valueattics – Reinsurance Company in India, which jointly set up by Fairfax Financials and Kamesh Goyal.
Meanwhile, IDBI Bank shares rallied sharply on Wednesday, closing at Rs 89.85 on the National Stock Exchange, up 8.33 per cent from the previous close of Rs 82.94. The stock touched an intraday high of Rs 93.60.
The restructuring comes after a significant improvement in IDBI Bank’s financial position.
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