Fairfax to buy IDBI Bank stake for ₹52,878 cr in India's biggest financial sector deal

The Union Cabinet has approved the sale of 60.72% of IDBI Bank to Canada Inc, a company backed by Fairfax Financial, for ₹52,878 crore.

In simple words, the government and LIC are selling most of their combined ownership in IDBI Bank to a Canadian investor.

The deets: here's how the ownership will change.

The government is calling this deal a strategic restructuring, meaning a change in IDBI Bank's ownership, rather than simply a stake sale.

Background: in September 2018, nearly 32% of Bank's loans were classified as bad loans.

The government had to step in with financial support, while LIC acquired a majority stake in the bank in 2019. In the same year the Bank was classified as a private sector bank by the RBI after LIC’s ₹21,624 crore investment.

Since then, IDBI Bank's financial health has improved considerably.

By March 2026, its bad-loan ratio had fallen to just 2.32%, and the bank reported a profit of ₹9,513 crore in FY26.

So, the government is now selling a controlling stake in a bank that is in much better financial shape than it was a few years ago.

What happens next?

IDBI Bank's name will remain unchanged. Customers won't suddenly see the bank operating under a new brand.

• Fairfax cannot immediately sell its investment. The agreement requires the invested capital to remain locked in for three years.
• The deal is expected to be signed before the end of 2026.
• RBI conditions still apply. Fairfax will need to submit a plan showing how it will meet the banking regulator's requirements.
• The CSB Bank question: because Fairfax already owns a stake in CSB Bank, it will have to decide whether to combine CSB with IDBI Bank or sell its CSB stake within two years of signing the agreement.

The government has also said that LIC will need to reduce its remaining IDBI Bank stake to 15% within two years.

Big picture: as per official sources, the government is expected to raise ₹88,000 crore in FY27 by selling stakes in companies and earning money from government-owned assets, exceeding its Budget target of ₹80,000 crore for the first time since FY19.

The IDBI Bank deal alone is expected to bring around ₹26,000 crore to the government.