Fairfax-Linked Company to Buy 60.72% of IDBI Bank at ₹81 a Share, Pending RBI Clearance

The Cabinet Committee on Economic Affairs approved on 14 October 2026 the sale of a 60.72% stake in IDBI Bank to 10955230 Canada Inc, a company tied to Fairfax Financial Holdings. The price is ₹81 a share, for a total of ₹52,878 crore. The government and the Life Insurance Corporation of India (LIC) are selling 30.48% and 30.24%, and will keep a combined 34%.

Government and LIC Keep 34% After Selling 60.72%

The government will sell 30.48% and keep 15%. LIC will sell 30.24% and keep 19%, according to Business Today's report of 14 October and Forbes India. The 60.72% being sold is the sum of those two sales. Business Today's report of 16 October quotes Chawla as saying the market regulator directed LIC to cut its stake from 19% to 15% after the divestment. Based on the reported figures, the government's holding before the sale was 45.48%, and LIC's was 49.24% if its post-sale stake is 19%, or 45.24% if it is 15%.

Union minister Ashwini Vaishnaw said that retaining the 34% stake would significantly raise the value of the holdings of the government and LIC, Forbes India reports. IndiaInfoline reports that LIC will dispose of its portion under its internal procedure and applicable laws.

IndiaInfoline also reports that the transaction remains subject to the necessary approvals and formalities before it is finalised.

For readers, the reports so far mean three things: the government and LIC would keep 34% between them after the sale, though the Cabinet Committee on Economic Affairs has delegated powers to sell the government's residual 15% through the open market; the buyer becomes the majority shareholder once the sale closes; and the sale depends on the approvals set out below.

What the Sale Means for Employees and Depositors

DIPAM Secretary Arunish Chawla said the service conditions of IDBI Bank employees will be fully protected and their pension benefits protected through a dedicated pension fund. Business Today reported the remarks on 16 October.

Forbes India reports that finance ministry sources say no depositor or borrower will be affected by the restructuring. It also reports that deposits remain insured up to ₹5 lakh per depositor under the Deposit Insurance and Credit Guarantee Corporation (DICGC), and that the mandatory 40% priority sector lending target applies to all private commercial banks.

Approvals and Timing Still Open After the Cabinet Decision

On 16 October, Business Today reported Chawla as saying the sale is expected to be completed by the end of the current financial year, subject to clearance from the Reserve Bank of India (RBI). The reports give no formal completion date.

IndiaInfoline calls the Cabinet decision a significant step and reports that the buyer must submit its credentials to the RBI and a roadmap addressing the central bank's conditions. Business Today says the buyer must present its credentials to the RBI under the fit and proper assessment, and that the share purchase agreement will be signed only after RBI clearance.

Forbes India says the buyer must make an open offer to minority shareholders, and cites a finance ministry source saying invested capital will be locked in for three years. Business Today's 16 October report says the open offer comes after the agreement is signed. A finance ministry source, as cited by Forbes India, says the deal would be completed this year.

The price is ₹81 a share, for a total of ₹52,878 crore.

Why It Is Described as the Largest Foreign Investment in Finance

Vaishnaw said the transaction will be the biggest foreign direct investment in India's financial sector. Forbes India calls it the largest such investment in the financial sector so far.

The price of ₹81 a share is above the benchmark of ₹75.99, which Business Today says is the average of two independent valuations. That is about 6.6% above the benchmark. Business Today's report of 14 October gives the total as ₹52,878.08 crore, while its report of 16 October gives about ₹53,000 crore, or .5 billion.

The reports differ on the buyer's link to Fairfax. Business Today calls 10955230 Canada Inc the parent of Fairfax Financial Holdings, while IndiaInfoline describes it as a subsidiary.