Canada's Fairfax buys majority stake in IDBI Bank for $5.56 billion (updated)

IDBI Bank

14/10/2026 11:58

Acquisition will be India's biggest cross-border bank deal
Federal government, LIC selling combined 60.7% stake in lender
Government, LIC will retain 34% stake after transaction
India has seen burst of cross-border investment in the financial sector
Recasts through with details of deal, context
NEW DELHI, Oct 14 (Reuters) - Canada's Fairfax Financial Holdings FFH.TO will buy a majority stake in India's IDBI Bank IDBI.NS in a deal worth 528.78 billion Indian rupees ($5.56 billion), the Indian government said on Wednesday.
The acquisition, in the making for over four years, will see Fairfax take control of IDBI Bank in India's biggest cross-border bank deal.
Fairfax will offer 81 rupees per share for IDBI Bank above the benchmark price of 75.99 per share determined by the government based on fair valuations, Indian officials said in a statement.
Shares of IDBI Bank closed at 90.44 rupees per share, up 9% on the day. The announcement came after the close of trade. 

INDIA SEEING RUSH OF FOREIGN INVESTMENTS
India's federal government and state-run Life Insurance Corp of India LIFI.NS are selling a combined 60.7% stake in IDBI Bank. They will retain a 34% stake after the transaction, and can sell their holdings in the open market as part of the agreement.
The deal is subject to approvals from the Reserve Bank of India, the country's central bank and banking regulator.
Over the last two years, India has seen a rush of foreign investments in the financial sector, which is seeing strong demand for credit and low delinquencies.
Last year, Emirates NBD said it was acquiring a stake in private lender RBL Bank RATB.NS for $3 billion. 
Japan's Sumitomo Mitsui Banking Corporation SUMFDS.UL also bought a 20% stake in Yes Bank YESB.NS, and MUFG 8306.T acquired a 20% holding in non-bank lender Shriram Finance SHMF.NS for $4.4 billion. 

LIMITED SUCCESS IN PRIVATISATION 
India in 2021 announced a major programme to privatise most of its state-run companies, including in the four sectors it sees as sensitive, which include telecoms and banking.
Since then, the sale of Air India to the Tata Group has been the Modi government's major success. 
India in May privatised a smaller state-run firm, Indian Medicines Pharmaceutical Corp, and has sold indirect holdings in steel-maker Neelachal Ispat Nigam Ltd to Tata Steel TISC.NS, and Ferro Scrap Nigam to Konoike Transport Co 9025.T.
The plan to sell the IDBI stake was first announced in 2022, but was shelved in March as bids fell short of the government's sale price expectation. 
It was restarted after the government lowered its price expectations after accounting for a fall in IDBI's publicly traded price.
The lender had total assets of 4.44 trillion rupees, or $46.66 billion, as of June 2026. It has business across retail and institutional segments, and more than 2,000 branches across the country.
It had a gross bad loan ratio of 2.3% as of June, down sharply from nearly 32% in September 2018.
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 and online brokerage firm 5paisa.
($1 = 95.1500 Indian rupees)

 (Reporting by Hritam Mukherjee, Nikunj Ohri and Aftab Ahmed in New Delhi; Additional reporting by Gopika Gopakumar and Ashwin Manikandan in Mumbai; Writing by Shanima Aniyeri and Ira Dugal; Editing by Sonia Cheema and Jan Harvey)
 ((shanima.a@thomsonreuters.com;))