Fairfax wins IDBI Bank after government lowers its asking price

Companies No. 71 16 October 2026 · 3 min read

On 14 October 2026, the Cabinet picked Fairfax Financial to buy 60.72% of IDBI Bank for ₹52,878 crore, or ₹81 a share. The government is selling 30.48% and LIC, the state-owned insurer, another 30.24%.

The government and LIC will keep 15% and 19%, respectively, but give up control of the bank.

Fairfax is a Canadian insurance group founded by Prem Watsa in 1985. It invests the money its insurance businesses collect and hold. Fairfax has invested $1.7 billion in Indian companies, now worth $4.3 billion. Its investments include 49% of insurer Go Digit. Through its listed arm, Fairfax India, it also owns stakes in Bangalore airport and CSB Bank.

At ₹52,878 crore, IDBI Bank would be Fairfax's biggest investment in India by far. The ₹52,878 crore will be split almost equally between the government and LIC.

The sale price took 2 attempts to settle. The government first asked for at least ₹94.42 a share, when the stock traded at ₹108.12. The best bid was ₹75, so the sale was rejected.

The government then changed how it valued the bank, excluding the effect of the sale on its share price. 2 valuers arrived at an average value of ₹75.99 a share. Fairfax offered ₹81, just 6.6% above this revised benchmark, but 14% below the government's original asking price.

The government's share alone is enough to cover the ₹17,852 crore it still needed to meet its asset-sale target for 2026-27, as of August. But the money will come only after the deal closes. Fairfax says a binding agreement has not yet been signed.

Fairfax plans to bring banking, insurance and investment services under one roof by combining IDBI Bank with Go Digit and IIFL Capital, a brokerage in which Fairfax India owns 27%.

The deal also requires Fairfax to make an open offer, giving other shareholders a chance to sell their shares. Fairfax must retain at least 40% of IDBI Bank for 5 years.

There is one more complication: Fairfax already has an indirect stake in CSB Bank through Fairfax India. Owning IDBI would give it interests in 2 Indian banks. The official sale terms say that if the RBI requires IDBI Bank to merge with its buyer, the government and LIC will vote in favour. Business Today has reported that Fairfax must merge CSB Bank or sell its stake within 2 years, though it did not name its source.

Who owns IDBI Bank before and after the sale to Fairfax, in %. Before: LIC 49.24, the government 45.48, everyone else 5.29. After: Fairfax 60.72, LIC 19.00, the government 15.00, everyone else 5.29.

Fairfax's ₹81 for IDBI Bank is below the first ₹94.42 floor

The government's floor and the best bid in each round, in ₹ a share. Fairfax won round 2, after the floor was reset lower.

Ministry of Finance press release, 14 October 2026, filed by IDBI Bank on BSE · 2025-26 and 2026-27

IDBI money would take the government past its sale target

What the government raised in 2026-27 by selling its stakes in companies and other assets, against the budget's target, in ₹ crore. Its half of the IDBI money would take it past the target.

Union Budget 2026-27 Receipt Budget; Controller General of Accounts; Ministry of Finance release on IDBI Bank, 14 October 2026 · 2026-27

Sources