Cabinet clears way for Watsa's Fairfax's Rs 52,878 crore deal for 60.72% stake in IDBI Bank

Benchmarks Nifty22,622.70-99.25FEATURED FUNDS★★★★★UTI Aggressive Hybrid Fund Regular Plan-Growth5Y Return8.71 % Invest NowFEATURED FUNDS★★★★★Motilal Oswal Midcap Fund Direct-Growth5Y Return19.29 % Invest NowEnter search text: HomeETPrimeMarketsMarket DataMasterclassNewsIndustrySMEPoliticsWealthMFTechAIWorldOpinionNRIPanacheMore Menu Business News›Industry›Banking/Finance›Banking›Cabinet clears way for Watsa's Fairfax's Rs 52,878 crore deal for 60.72% stake in IDBI Bank The Economic Times daily newspaper is available online now.

Read Today's Paper Cabinet clears way for Watsa's Fairfax's Rs 52,878 crore deal for 60.72% stake in IDBI BankSECTIONSCabinet clears way for Watsa's Fairfax's Rs 52,878 crore deal for 60.72% stake in IDBI BankET BureauLast Updated: Oct 15, 2026, 05:30:00 AM ISTRate StoryFollow usShareFont SizeAbcSmallAbcMediumAbcLargeSavePrintCommentSynopsisFairfax Financial Holdings will acquire a majority stake of 60.72% in IDBI Bank for ₹52,878 crore. This acquisition marks a significant moment in the government's divestment efforts, as it represents strategic restructuring.

The deal aims to strengthen the banking ecosystem and support the government's disinvestment target for the fiscal year. IDBI Bank's financial position has improved significantly, with reduced non-performing assets.ReutersAt $5.5 billion, deal is single largest FDI in financial sector, biggest stake sale by govtNew Delhi: Canadian billionaire Prem Watsa's Fairfax Financial Holdings will acquire a majority 60.72% stake in IDBI Bank for ₹52,878 crore ($5.5 billion), in a deal approved by the Cabinet Committee on Economic Affairs on Wednesday, bringing to an end the government's four-year divestment effort.

Although state-backed, IDBI Bank is classified by the Reserve Bank of India as a private sector bank. This is the largest foreign direct investment (FDI) in the country's financial sector and biggest stake sale by the government. "This process has been brought to its logical conclusion," said finance minister Nirmala Sitharaman. "We are calling it strategic restructuring as we are still invested in IDBI Bank." Fairfax subsidiary M/s 10955230 Canada Inc will pay ₹81 a share, higher than the average ₹75.99 per share valuation by two independent valuations, the government said.Also read: IDBI Bank strategic restructuring to attract FDI, boost banking sector, says FM SitharamanET BureauMove Helps Meet Divestment TargetFairfax, which currently holds a 40% stake in Kerala-based CSB Bank, will have to either merge it with IDBI Bank or exit the latter within two years of signing the deal under the rules.

Live EventsThe bank's stock surged 9% to close at Rs 90.44 apiece on Wednesday, although the deal was announced after market hours. The record flow from the IDBI Bank stake sale is expected to help the government meet its Rs 80,000 crore disinvestment target for the current fiscal year.Fairfax will pick up a 30.48% stake from the government and another 30.24% from the Life Insurance Corporation of India.After conclusion of the deal, expected in the current financial year, LIC will have 19% in the bank while the government will be left with 15%."This will not only strengthen the banking ecosystem but also help banking services surpass global benchmarks," Sitharaman said.

"It reinforces that India's growth story is strong, its economy is resilient, and the government's commitment to reform is unwavering." She was speaking after the CCEA, chaired by Prime Minister Narendra Modi, approved the stake sale on Wednesday.The deal marks a significant milestone in the government's efforts to lower state ownership in commercial enterprises in non-strategic sectors.The CCEA has also authorised the so-called alternative mechanism, an empowered group of cabinet ministers, to offload IDBI shares - from the remaining 15% stake that the government will hold after the divestment - through the open market.The deal will need to be approved by RBI, which will conduct a "fit and proper" assessment, as well as the Competition Commission of India and other statutory authorities.Also read: Fairfax offers plan to resolve IDBI-CSB ownership overlappingET BureauFairfax will be required to present its credentials to the central bank and submit a roadmap for meeting the regulator's requirements before the sale can be finalised.

As per RBI norms, promoters can hold no more than 26% in a bank. Fairfax will get up to 15 years to comply with this condition, Department of Investment and Public Asset Management secretary Arunish Chawla said, adding that there will be a lock-in period of five years for the promoter.The new promoter will also have to retain the name, brand and customer relations for at least three years, he said. Employees don't have to worry, Chawla said, adding that the management transfer had been discussed with all stakeholders.LIC will have to cut its stake to 15% from 19% in IDBI Bank in two years.After completing the transaction, likely before the end of FY27, the government will exit from the IDBI Bank board.The ministry said RBI's regulatory supervision, deposit insurance and priority-sector lending requirements will remain unchanged.

Deposits will continue to be insured up to Rs 5 lakh per depositor under the Deposit Insurance and Credit Guarantee Corporation framework.IDBI Bank will also continue to provide services to government welfare schemes. These include the Pradhan Mantri Jan-Dhan Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana, Pradhan Mantri Suraksha Bima Yojana, the Atal Pension Yojana, PM Mudra Yojana loans for micro and small enterprises, and GeM Sahay, collateral-free, digital working capital loans based on government e-marketplace transaction records.The finance ministry said five contenders had initially submitted expressions of interest for IDBI, with four of them qualifying.

Two were picked as qualified bidders, the ministry said.Bids were initially invited last fiscal FY26, when the reserve price was fixed at Rs 94.42 per share. Offers fell short of the reserve price and were not accepted.Qualified bidders were asked to submit their best offers in the current fiscal year. These revised offers were considered by the cabinet committee.According to the statement, IDBI Bank's financial position has improved since it was placed under RBI's Prompt Corrective Action framework in May 2017.

The restrictions were lifted in March 2021 following the improvement. Gross non-performing assets declined from 31.78% in September 2018 to 2.32% in March 2026, while net non-performing assets fell from 17.30% to 0.15%.Its capital adequacy ratio rose from 6.22% in 2018 to 26.65% in March this year. The bank reported a net profit of Rs 9,513 crore in FY26, while total business crossed Rs 6.27 lakh crore as of September 30, up 18% year-on-year. Add as a Reliable and Trusted News Source Add Now!

(You can now subscribe to our Economic Times WhatsApp channel)Read More News onidbi banklife insurance corporation of indiaFairfax Financial HoldingsIDBI BankPrem WatsaIndian government divestmentforeign direct investment in Indiabanking sector reformLife Insurance Corporation of IndiaReserve Bank of India(Catch all the Business News, Breaking News and Latest News Updates on The Economic Times.) Subscribe to The Economic Times Prime and read the ET ePaper online....moreless(You can now subscribe to our Economic Times WhatsApp channel)Read More News onidbi banklife insurance corporation of indiaFairfax Financial HoldingsIDBI BankPrem WatsaIndian government divestmentforeign direct investment in Indiabanking sector reformLife Insurance Corporation of IndiaReserve Bank of India(Catch all the Business News, Breaking News and Latest News Updates on The Economic Times.) Subscribe to The Economic Times Prime and read the ET ePaper online....morelessMost Searched StocksIRFC Share Price79.75-24.6%03:57 PM | 14 Oct 20260.13(0.17%) Upside Suzlon Energy Share Price40.854.1%03:59 PM | 14 Oct 20260.61(1.52%) Upside IREDA Share Price108.4738.4%03:58 PM | 14 Oct 20260.08(0.08%) Upside Tata Motors PV Share Price283.825.5%03:59 PM | 14 Oct 2026-2.06(-0.72%) Upside YES Bank Share Price21.21.4%03:59 PM | 14 Oct 20260.35(1.68%) Upside HDFC Bank Share Price710.739.0%03:59 PM | 14 Oct 2026-3.3(-0.47%) Upside NHPC Share Price73.7218.5%03:59 PM | 14 Oct 20260.24(0.32%) Upside RVNL Share Price196.8826.5%03:58 PM | 14 Oct 2026-0.43(-0.22%) Upside SBI Share Price954.930.9%03:59 PM | 14 Oct 2026-2.11(-0.22%) Upside Tata Power Share Price353.022.2%03:59 PM | 14 Oct 20268.0(2.32%) Upside Tata Steel Share Price174.4924.7%03:59 PM | 14 Oct 2026-0.51(-0.3%) Upside Adani Power Share Price195.1534.8%03:59 PM | 14 Oct 20269.19(4.95%) Upside PayTM Share Price1712.48.5%03:59 PM | 14 Oct 2026-2.6(-0.16%) Upside PNB Share Price118.54.4%03:59 PM | 14 Oct 20261.96(1.68%) Upside Eternal Share Price316.016.1%03:59 PM | 14 Oct 2026-4.45(-1.39%) Upside BEL Share Price382.3528.8%03:59 PM | 14 Oct 20262.36(0.62%) Upside BHEL Share Price464.0-9.0%03:59 PM | 14 Oct 202621.65(4.9%) Upside Infosys Share Price1088.012.0%03:59 PM | 14 Oct 202625.91(2.44%) Upside IRCTC Share Price477.130.6%03:59 PM | 14 Oct 20268.21(1.75%) Upside ITC Share Price261.527.7%03:59 PM | 14 Oct 20260.5(0.2%) Upside Jio Financial Services Share Price219.040.7%03:59 PM | 14 Oct 20261.2(0.56%) Upside LIC Share Price394.033.4%03:59 PM | 14 Oct 2026-0.06(-0.02%) Upside RIL Share Price1174.644.6%03:59 PM | 14 Oct 20267.9(0.68%) Upside HAL Share Price4933.013.1%03:59 PM | 14 Oct 202664.0(1.32%) Upside JP Power Share Price15.43null%03:59 PM | 14 Oct 20260.36(2.39%) Upside NBCC Share Price76.2168.4%03:59 PM | 14 Oct 2026-1.0(-1.29%) Upside TCS Share Price2304.93.9%03:59 PM | 14 Oct 202635.6(1.57%) Upside Vedanta Share Price250.022.5%03:59 PM | 14 Oct 2026-6.31(-2.46%) Upside Wipro Share Price170.922.4%03:59 PM | 14 Oct 20261.92(1.14%) Upside Indian Oil Corp.

Share Price127.826.1%03:59 PM | 14 Oct 20261.66(1.32%) Upside Ircon Intl. Share Price106.7730.6%03:58 PM | 14 Oct 20260.75(0.71%) Upside SAIL Share Price170.02.5%03:59 PM | 14 Oct 2026-2.78(-1.61%) Upside SJVN Share Price56.7745.7%03:59 PM | 14 Oct 20260.71(1.25%) Upside GAIL Share Price166.9615.8%03:59 PM | 14 Oct 2026-1.35(-0.8%) Upside HUDCO Share Price164.0544.4%03:59 PM | 14 Oct 2026-0.11(-0.07%) Upside REC Share Price311.840.6%03:59 PM | 14 Oct 20264.81(1.57%) Upside Reliance Power Share Price19.83null%03:59 PM | 14 Oct 2026-0.21(-1.0%) Upside Tata Technologies Share Price745.55-8.6%03:59 PM | 14 Oct 20261.85(0.25%) Upside Vodafone Idea Share Price12.67-5.5%03:59 PM | 14 Oct 2026-0.14(-1.02%) Upside Adani Ent.

Share Price2722.640.0%03:59 PM | 14 Oct 202627.6(1.03%) Upside Adani Green Share Price1318.422.0%03:59 PM | 14 Oct 202631.41(2.44%) Upside Adani Ports SEZ Share Price1748.715.8%03:59 PM | 14 Oct 2026-14.3(-0.82%) Upside Ashok Leyland Share Price145.025.3%03:59 PM | 14 Oct 2026-2.38(-1.61%) Upside Bank of Baroda Share Price229.022.2%03:59 PM | 14 Oct 2026-9.44(-3.96%) Upside BSE Share Price3338.010.3%03:59 PM | 14 Oct 2026-37.41(-1.11%) Upside Canara Bank Share Price124.7623.9%03:59 PM | 14 Oct 20264.33(3.59%) Upside CDSL Share Price1284.02.7%03:59 PM | 14 Oct 2026-8.0(-0.62%) Upside Coal India Ltd Share Price417.015.6%03:59 PM | 14 Oct 20268.5(2.09%) Upside HFCL Share Price256.65null%03:59 PM | 14 Oct 2026-5.36(-2.05%) Upside IDFC First Bank Share Price78.7414.9%03:59 PM | 14 Oct 2026-0.1(-0.12%) Upside Load more..

Discover the stocks with maximum upside potential based on the key investment themes.* Investments in securities are subject to market risks. These are indicative and should not be interpreted as investment advice or guaranteed returns. Latest from ETJio IPO: 5 strengths that make it more than just a telco giantDiwali gets less sweet as sugar prices climb higherAir India to IDBI: Modi & Co's big disinvestmentsPopular in IndustryIHC, First Abu Dhabi eye stake in Bandhan Bank promoterCabinet approves Rs 52,878 crore IDBI Bank sale to Fairfax arm in India’s largest financial-sector FDIIndia’s hidden gold chest is giving imported bullion a run for its moneyBlackouts hit Indian factories as coal crunch feeds into economyIRDAI may allow transition period for insurance fee capTop Trending Industry TermsOscars 2025 Live News UpdateAgriculture Budget 2025 Live UpdatesEnter search text: Find this comment offensive?Choose your reason below and click on the Report button.

This will alert our moderators to take actionNameReason for reporting:Foul languageSlanderousInciting hatred against a certain communityOthersYour Reason has been Reported to the admin.XTo post this comment you mustLog In/Connect with:The Economic TimesorFill in your details:Will be displayedWill not be displayedWill be displayedShare this Comment:Post to Twitter Continue reading with one of these options:Limited AccessFreeLogin to get access to some exclusive stories & personalised newslettersLogin NowUnlimited AccessStarting @ Rs120/monthGet access to exclusive stories, expert opinions & in-depth stock reportsSubscribe NowET Unlock Access to All Exclusives with ETPrime FREE TRIAL15 Days Free: Unlock All ETPrime Exclusives, Market Tools & ePapersTrial offer expiring in00 : 05 : 00Start Your Free TrialNo Payment RequiredI'd rather pay ₹2599 now Uh-oh!

This is an exclusive story available for selected readers only.Worry not. You’re just a step away.Sign In to Read for Free Prime Account Detected!It seems like you're already an ETPrime member withLogin using your ET Prime credentials to enjoy all member benefitsLog out of your current logged-in account and log in again using your ET Prime credentials to enjoy all member benefits.Sign in & Access ET Prime Unlock ETPrime's Exclusive Stories Today!Subscribe to gain powerful insights on business, stock market and industry trends.Big Price Drop!

Flat 40% OffAvail OfferStudent Only OfferAlready a Member? Sign In now Already a Member? Sign In nowSubscribe NowAlready a Member? Sign In nowOffer Exclusively For YouSave up to Rs.

700/-ON ET PRIME MEMBERSHIPAvail OfferOffer Exclusively For YouGet 1 Year FreeWith 1 and 2-Year ET prime membershipAvail OfferOffer Exclusively For YouGet 1 Year FreeWith 1 and 2-Year ET prime membershipAvail OfferOffer Exclusively For YouGet Flat 40% OffThen ₹ 1749 for 1 yearAvail OfferOffer Exclusively For YouET Prime at ₹ 49 for 1 monthThen ₹ 1749 for 1 yearAvail OfferSpecial OfferGet flat 40% off on ETPrimeAvail OfferAvail Offer Continue with Email Continue with Mobile No. Claim NowAlready a Member?

Sign In now Need Assistance? Connect with an ETPrime expert for personalized support and guidance Get a Call Back +91 9484700004 What’s Included withETPrime Membership 1Exclusive Insights That MatterUncover the truth with our investigative storiesMake strategic moves using the real-world case studiesRead industry-specific stories to identify emerging trendsSpot opportunities with in-depth insights that matterTrump temper on H-1B visas is forcing Indians to do these things to stay put in USWhat Adani’s US indictment means for India Inc’s overseas fundraisingWhy veterans like Reliance, L&T are on acquisition spree?

Aswath Damodaran has an answer.Will China’s dollar bond sale in Saudi Arabia trump the US in financial world?Huawei launches its own OS to compete with Google and Apple. But can it win beyond China?The problem with lab grown diamondsWhy a falling rupee is a better option for the economyA list of top 20 momentum stocks that have delivered massive returns in one year2Invest Wisely With Smart Market Tools & Investment IdeasAlpha TradeGet daily trade ideas from SEBI-registered research analysts.Investment IdeasGrow your wealth with stock ideas & sectoral trends.Stock Reports PlusAll-in-one stock research with Stock Score, peer comparison & key signals.BigBull PortfolioGet to know where the market bulls are investing to identify the right stocks.Stock AnalyzerCheck the score based on the company's fundamentals, solvency, growth, risk & ownership to decide the right stocks.Market MoodAnalyze the market sentiments & identify the trend reversal for strategic decisions.Stock Talk Live at 9 AM DailyAsk your stock queries & get assured replies by ET appointed, SEBI registered experts.3Stay informed anytime, anywhere with ET ePaperePaper - Print ViewRead the PDF version of ET newspaper.

Download & access it offline anytime.ePaper - Digital ViewRead your daily newspaper in Digital View & get it delivered to your inbox everyday.Wealth EditionManage your money efficiently with this weekly money management guide.4Times Of India Subscription (1 Year)TOI ePaperRead the PDF version of TOI newspaper. Download & access it offline anytime.Deep ExplainersExplore the In-depth explanation of complex topics for everyday life decisions.Health+ StoriesGet fitter with daily health insights committed to your well-being.Personal Finance+ StoriesManage your wealth better with in-depth insights & updates on finance.5Enjoy Complimentary Subscriptions From Top BrandsDocubay SubscriptionStream new documentaries from all across the world every day.Stories you might be interested inSubscribe to ourET Investment OpportunitiesSUBMIT

Source: The Times of India