Fairfax Financial to Acquire 60.72% Stake in IDBI Bank for $5.6 Billion
Canadian billionaire Prem Watsa’s Fairfax Financial Holdings Ltd. will acquire a 60.72% stake in IDBI Bank Ltd. for ₹528.78 billion ($5.6 billion), marking the largest foreign investment in India’s financial services sector. The transaction values the Mumbai-based lender at approximately ₹871 billion, with the Indian government and Life Insurance Corporation of India retaining a combined 34% stake. The deal represents an 11% discount to IDBI Bank’s closing share price of ₹90.40 on Wednesday.
The acquisition marks a significant milestone in the Indian government’s efforts to reduce state ownership in the banking sector and attract greater foreign investment. Fairfax’s earlier bid for IDBI Bank had failed to meet the government’s reserve price, delaying the proposed sale. The deal will also expand Fairfax’s presence in India, where it already holds investments in CSB Bank Ltd. and IIFL Capital Services Ltd. However, Fairfax will be required to merge or exit its 40% stake in CSB Bank within two years of signing the share purchase agreement, according to government officials.
The transaction comes amid growing foreign interest in India’s financial sector, driven by economic growth and rising demand for banking services. The government expects the sale proceeds to support its disinvestment target of ₹800 billion for the current fiscal year. IDBI Bank, which previously struggled with high levels of non-performing assets, has returned to profitability following extensive financial restructuring and loan recovery efforts. The acquisition is also expected to support India’s broader ambition of becoming a developed economy by 2047 by strengthening its banking system and expanding access to capital.
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