Centre Approves 60.72% Stake Sale in IDBI Bank to Fairfax for ₹52,878 Crore

The Union government has approved the sale of a 60.72% stake in IDBI Bank to a subsidiary of Canada-based Fairfax Financial Holdings for ₹52,878 crore, marking a significant step towards the bank’s privatisation. The transaction involves the combined sale of shares held by the Centre and the Life Insurance Corporation of India (LIC).

Under the proposed deal, the government will sell its 30.48% stake in the lender, while LIC will divest 30.24% of its holdings. Fairfax emerged as the successful bidder with an offer of ₹81 per share, valuing the transaction at approximately ₹52,878 crore.

The approval marks an important milestone in the government’s efforts to reduce its ownership in IDBI Bank and attract private investment into the banking sector. However, the transaction will have to meet the applicable regulatory requirements before the transfer of ownership can be completed.

The Reserve Bank of India (RBI)’s assessment of the proposed buyer and the necessary regulatory clearances are among the key steps involved in finalising the transaction. The process is expected to determine the timeline for completing the stake sale. Following the proposed divestment, the government is expected to retain a 15% stake in IDBI Bank, while LIC will hold 19%. The remaining shares will continue to be held by other shareholders, including public investors.

The deal represents a major development in India’s financial sector, given the scale of the proposed investment and the involvement of a foreign financial services group. Once completed, the transaction is expected to rank among the largest foreign direct investment (FDI) deals in India’s financial sector. The IDBI Bank stake sale forms part of the government’s broader disinvestment strategy, which seeks to unlock the value of public-sector assets and encourage greater private-sector participation.