IDBI Bank shares plunge 7% as Cabinet approves Rs 52,878 crore stake sale to Fairfax at discount

Cabinet Committee on Economic Affairs clears sale of 60.72% stake in IDBI Bank to a subsidiary of Canada-based Fairfax Financial Holdings for Rs 52,878 crore. The transaction will be India’s largest foreign direct investment in the financial sector, Union Minister Ashwini Vaishnaw said.

Cabinet approves Fairfax stake sale in IDBI Bank

Cabinet Committee on Economic Affairs clears strategic sale of the Company to a subsidiary of Fairfax Financial Holdings – Union Government.

The transaction will involve transfer of the central government's 30.48% holding in UTI and Life Insurance Corporation of India's 30.24% holding in UTI, the Union government said.

The Fairfax entity will pay Rs. 81 per share for the stake, valued at Rs. 52,878.08 crore.

Vaishnaw described the transaction as India's largest foreign direct investment in the financial sector.

IDBI Bank shares fall in early trade

IDBI Bank shares fell 7% in early trade on Thursday, October 15, to around ₹84 after rising 9% in the previous session, according to market data.

The approved price was about 10.4% below IDBI Bank's Wednesday closing price of ₹90.40, market data showed.

Fairfax bid exceeded the ₹75.99 benchmark

Financial bids received in FY26 were rejected after falling below the government's reserve price of ₹94.42 per share, according to the Department of Investment and Public Asset Management.

The benchmark price used to evaluate revised bids was ₹75.99 per share, and Fairfax's winning offer exceeded it, the department said.

Fairfax must meet RBI conditions for the IDBI Bank acquisition

The share purchase agreement is expected to be signed and executed before the end of 2026, according to the Department of Investment and Public Asset Management secretary.

Fairfax's acquisition vehicle must submit its credentials to the Reserve Bank of India for a fit-and-proper assessment and provide a roadmap for meeting applicable requirements, according to the Department of Investment and Public Asset Management.

Fairfax's investment will be subject to a three-year lock-in period, the department said.

Life Insurance Corporation of India must reduce its remaining IDBI Bank holding to 15% within two years to comply with Reserve Bank of India norms, according to the department.

IDBI Bank will retain its existing brand name after the acquisition, the department said.

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