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On October 14, 2026, the Union Cabinet approved the strategic restructuring and stake sale of IDBI Bank to Prem Watsa’s Fairfax Financial Holdings for ₹52,878 crore.
This marks the largest Foreign Direct Investment (FDI) in India’s financial sector and the largest government disinvestment deal since Air India.
The transaction is being executed at a winning bid price of ₹81 per share. Under the approved framework, Fairfax’s subsidiary (M/s 10955230 Canada Inc.) will acquire a 60.72% controlling stake in the lender, divided almost equally between the two current major owners:
- Government of India Sale: Divesting a 30.48% stake.
- Life Insurance Corporation (LIC) Sale: Divesting a 30.24% stake.
Finance Minister Nirmala Sitharaman categorized the deal as a “strategic restructuring” rather than a complete exit, as the state will maintain a significant footprint:
- The Government will retain a 15% stake.
- LIC will retain a 19% stake.
- Together, they will keep a combined 34% minority holding in the bank.
While the Cabinet Committee on Economic Affairs (CCEA) has cleared the transaction, the deal still awaits a final mandatory “fit and proper ownership” assessment by the Reserve Bank of India (RBI), alongside necessary clearances from the Competition Commission of India (CCI). The formal share purchase agreement is scheduled to be signed and executed before the end of December 2026.
IDBI Bank will officially become a foreign-owned bank following the conclusion of this deal. The winning bidder, Fairfax Financial Holdings, is a massive financial conglomerate headquartered in Toronto, Canada, and led by the Indian-born Canadian billionaire Prem Watsa.
Because Fairfax’s Canadian subsidiary is acquiring a 60.72% controlling stake, IDBI Bank will transition from being a domestic Indian lender into a foreign-controlled institution.
