IDBI Bank shares jump 3% as Fairfax set to make biggest foreign investment in Indian lender, buy stake worth Rs 53,000 cr

Shares of IDBI Bank jumped around 3% on Wednesday after the government finalised Canada’s Fairfax Holdings for the sale of its stake in the bank, in a deal expected to be worth around Rs 53,000 crore ($5.5 billion).

The shares of the company jumped to Rs 88.99 apiece on Wednesday morning after people familiar with the matter told The Economic Times that the government took the decision on Tuesday after back to back meetings at the Finance Ministry. “Fairfax is now offering Rs 81 per share, which is higher than their offer of Rs 75 given last year,” one of the people said.

Fairfax’s Rs 5,300 crore investment in IDBI Bank
At this price, the government could raise nearly Rs 26,620 crore by selling 30.48% stake in the lender. State-run Life Insurance Corporation (LIC) meanwhile is also planning to sell 30.24% stake in IDBI Bank, which would take the total deal size to Rs 53,000 crore ($5.5 billion), making it the biggest foreign investment in an Indian bank.The huge transaction will require Prem Watsa-owned Fairfax Holdings to also make an open offer to the public shareholders of IDBI Bank. “After much discussion, the government and Fairfax have agreed to shake hands and the official announcement could be made anytime now,” the person familiar with the matter told The Economic Times.

Also Read | Fairfax to acquire IDBI Bank stake in $5.5 billion deal, biggest foreign investment in Indian bank
The successful bidder in IDBI’s stake sale process will have to go through a final assessment by the Reserve Bank of India to ensure that it meets the regulator’s ‘fit & proper’ standards. In addition, approvals will be needed from statutory and regulatory authorities, including the CCI.
Biggest foreign investment in an Indian bank
Currently, Emirates NBD’s purchase of a 60% stake in RBL Bank for $2.75 billion in 2025 holds the position of the biggest foreign investment in a bank. Fairfax’s IDBI Bank stake acquisition is likely to top that.

Back in May 2021, the Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, gave its in-principle approval for strategic disinvestment along with the transfer of management control in IDBI Bank.

In 2023, the government and Life Insurance Corporation (LIC) decided to offload a little over 30% each in IDBI Bank. The Centre and LIC own more than 94% stake in IDBI Bank – the former owning 45.48% and the latter holding 49.24% stake in the private lender.

While the government didn’t name the suitors, Prem Watsa’s Fairfax Financial and Emirates NBD had reportedly submitted financial bids. Earlier in February, Kotak Mahindra Bank clarified that it had not submitted a financial bid for the disinvestment process relating to IDBI Bank.

The government has been working to reduce its stake in IDBI Bank as part of a broader privatisation and asset-monetisation agenda, with the divestment seen as a key test case for strategic sales in the banking sector.

IDBI Bank share price
IDBI Bank shares gained around 10% in one week and 15% in one month. The stock is however down more than 15% in 2026 so far, and 10% in one year.

In the longer term, the shares of the lender have delivered 53% returns over three years and 132% over five years.

Also Read | RBI tightens governance framework, redefines bank board responsibilities

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