New Delhi: IDBI Bank shares fell more than 7 per cent on October 15 after the Cabinet Committee on Economic Affairs approved the sale of a 60.72 per cent stake to a Fairfax Financial Holdings-backed buyer for ₹52,878 crore.
The stock dropped as much as 7.45 per cent to ₹83.70 on the BSE around 10 am. At the latest reading in the report, it traded near ₹84.20, down almost 7 per cent.
The lender’s shares have declined 10 per cent over one year and 19 per cent since the start of 2026.
Government and LIC to Retain Stakes
The approved transaction involves the government selling 30.48 per cent and Life Insurance Corporation of India selling 30.24 per cent.
Following the transaction, the government would retain 15 per cent ownership, while LIC would hold 19 per cent.
Canada Inc., whose parent is Fairfax Financial Holdings, has been approved as the strategic buyer.
Finance Minister Nirmala Sitharaman described the deal as strategic restructuring rather than strategic disinvestment, emphasising that both state shareholders would remain invested.
RBI Requirements Remain Important
The approval followed evaluation by the Core Group of Secretaries on Disinvestment and consideration of recommendations from the Alternative Mechanism, according to the official statement.
The successful bidder must present its credentials to the Reserve Bank of India in line with the fit-and-proper assessment undertaken at the expression-of-interest stage.
It must also submit a roadmap explaining compliance with the regulatory conditions prescribed during that assessment.
The cabinet decision therefore represents approval of the buyer and transaction, while the stated regulatory requirements still need to be addressed.
A Major Financial Sector Transaction
The government said the acquisition, once completed, would represent India’s largest foreign direct investment transaction in the financial sector.
IDBI Bank had previously required capital support because of financial difficulties, first from the government and subsequently from LIC.
The announced consideration covers the majority stake acquisition.
