The Union Cabinet approved on Wednesday the strategic sale of a 60.72 % stake in IDBI Bank to Fairfax Financial Holdings for ₹52,878 crore. The transaction will transfer 30.48 % of the government’s equity and 30.24 % held by the Life Insurance Corporation of India (LIC) to Fairfax, while the government and LIC will jointly retain a 34 % stake in the restructured entity. This marks the end of a five‑year process aimed at reducing state ownership and attracting private capital into the financial sector.

In a statement, the government said the transaction would become the largest foreign direct investment in India’s financial sector to date. Union Minister Ashwini Vaishnaw highlighted that the restructuring would inject fresh capital into the financial services sector and open up investment opportunities as India seeks funds to support its economic expansion. He added that as India continues to grow rapidly, a significant need for growth capital exists and many growth opportunities are emerging in the coming years.

The CCEA approved M/s 10955230 Canada Inc, the parent entity of Fairfax Financial Holdings Ltd, as the strategic buyer for the transaction. The purchase consideration was ₹52,877.07 crore for the acquisition of the 60.72 % stake, comprising 30.48 % equity held by the Government of India and 30.24 % by LIC. The successful bidder offered ₹81 per share, above the benchmark price of ₹75.99 determined by two independent valuation agencies, according to the ministry.

The ministry noted that the stock market price of IDBI Bank was not considered an appropriate indicator of its intrinsic value because the shares were thinly traded and volatile during the valuation period. The shares traded in a range of ₹61.01 to ₹118.38 per share during that period, while the price stood at ₹70.38 on 18 May 2026, the last trading day before invitations for best‑offer bids were issued.

The CCEA has delegated powers to an empowered group of Cabinet ministers to sell the government’s residual 15 % stake through the open market in accordance with the prescribed procedure. LIC will be free to manage its remaining 19 % stake under its internal procedures, subject to regulatory directions. DIPAM Secretary Arunish Chawla said the deal will be completed before the end of the current fiscal year, and Fairfax will also have to make an open offer to the minority shareholders.