Summary:
The Cabinet has approved Fairfax-backed 10955230 Canada Inc’s proposed acquisition of a 60.72% stake in IDBI Bank for ₹52,878.08 crore. The transaction, priced at ₹81 per share, remains subject to regulatory approvals and completion of formalities, including RBI requirements.
What is the Fairfax–IDBI Bank deal?
The Cabinet Committee on Economic Affairs (CCEA) on October 14, 2026 approved the sale of 60.72% stake in IDBI Bank Ltd to a subsidiary of Fairfax Financial Holdings of Canada for ₹52,878.08 crore. Once done, it will be the largest foreign direct investment (FDI) in the financial services sector for India. The approval is an important step in the bank’s long process of strategic disinvestment.
Fairfax to Buy 60.72% Stake in IDBI Bank
Under the approved deal, 10955230 Canada Inc, which is backed by Fairfax, will acquire shares from the Government of India and Life Insurance Corporation of India (LIC).
Key deal facts are:
- Total deal value: ₹52,878.08 crore
- Shares sold: 60.72%
- Divested govt stake: 30.48%
- LIC stake sale: 30.24%
- Buy price: ₹81 per share
- Valuation of the bank (implied): ₹87,100 crore
The government will hold 15% stake while LIC will be holding around 19% post the issue.
The deal followed a competitive bidding process that started in October 2022. Two of the five parties that were initially interested in the deal submitted qualified financial bids.
Deal Value and Regulatory Approvals
Fairfax’s offer of ₹81 per share was a premium of 6.6% to the benchmark valuation of ₹75.99 per share, assessed independently by the company.
The deal values IDBI Bank at about ₹87,100 crore but that is not the same as the bank's valuation in the stock market currently.
The transaction is still subject to regulatory conditions and completion of formalities, including those of the Reserve Bank of India (RBI).
The rest of the approvals and procedures are expected to close the transaction by March 2027.
Fairfax already has a presence in the financial services space in India through insurance and other financial businesses. Acquisition of IDBI bank will give a big thrust to its banking exposure.
Asset Quality, Balance Sheet of IDBI Bank
IDBI Bank net profit was ₹2,115 crore in Q1FY27 vs ₹2,007 crore in Q1FY26, up 5% YoY.
Key financial highlights for Q1FY27:
| Particulars | Q1FY27 | Q1FY26 |
| Net Profit | ₹2,115 crore | ₹2,007 crore |
| Operating Profit | ₹2,168 crore | ₹2,354 crore |
| Net Interest Margin | 3.61% | 3.68% |
| Gross NPA Ratio | 2.30% | 2.93% |
| Net NPA Ratio | 0.16% | 0.21% |
Bank's net advances grew 22% YoY to ₹2,58,968 crore and deposits increased 10% to ₹3,25,757 crore as on June 30, 2026.
Asset quality has improved substantially over the last few years. Gross NPA ratio declined sharply to 2.32% in March 2026 from 31.78% in September 2018, indicating a substantial reduction in stressed loans.
Implications for India’s Banking Sector From the Deal
The proposed acquisition is being made at a time when foreign investment into India’s banking and financial services industry is rising.
The deal is a milestone in the government’s strategic disinvestment program while retaining a minority stake in IDBI Bank.
The deal could also influence the bank’s future ownership, its capital allocation, technology investments and its expansion plans.
However, the financial impact will depend on regulatory approvals, transaction completion and subsequent operational decisions.
With this deal, valued at ₹52,878 crore, the ownership pattern of IDBI Bank will undergo a major change. The long term impact on business growth, profitability and shareholder value will be clearer once completed.
