The Indian government has designated Fairfax as the “strategic buyer” for a 60.72% equity stake in IDBI Bank for approximately Rs528.78bn ($5.6bn).
The proposed price is above IDBI Bank’s book value as of 30 June 2026.
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Under the approved structure, the Government of India and Life Insurance Corporation of India (LIC) will divest 30.48% and 30.24% of their stakes, respectively.
Post-transaction, the government will retain a 15% residual shareholding, while LIC will keep 19%.
Fairfax intends to use a combination of cash held by the group, funds available through existing credit sources, and possible asset sales to finance the purchase.
As part of its proposed plan to make IDBI Bank a “leading Indian global bank”, Fairfax would transfer its entire interests in Go Digit Life Insurance and Go Digit General Insurance to the lender.
Fairfax India would also transfer its full interest in IIFL Capital Services.
The transactions require several regulatory approvals.
The Reserve Bank of India must approve the proposed contributions of Digit and IIFL Capital, as well as Fairfax’s plan for IDBI Bank.
The contribution transactions would also require approval from the Securities and Exchange Board of India.
In addition, the digit contribution would need clearance from the Insurance Regulatory and Development Authority of India.
If the proposed purchase transaction and contribution transactions are completed, Fairfax expects Rakesh Sharma, IDBI Bank’s current managing director and CEO, to continue leading the combined company.
Fairfax also intends to include C. VR. Rajendran, former CEO of CSB Bank, in IDBI Bank’s leadership group.
The selection of Fairfax as the “strategic buyer” is not the final step in the IDBI Bank disinvestment process.
No binding definitive agreements have been signed by Fairfax, IDBI Bank, the Government of India, or any other party in relation to either the purchase transaction or the contribution transactions.
As a result, there is no assurance that the transactions will be completed on the proposed terms, or that they will proceed.
Fairfax Financial Holdings chairman and CEO Prem Watsa said: “This transaction represents a once-in-a-lifetime opportunity to purchase a majority interest in a bank in one of the world’s fastest growing economies and to combine it with a successful and growing insurance company and an established provider of investment banking and wealth management services in the same jurisdiction.
“Combining IDBI Bank, Digit, and IIFL Capital would create an entity that is well-positioned to participate in the continued growth and success of Indian markets, and we expect it will provide meaningful and significant benefits to Indian consumers and businesses, as well as to IDBI Bank, Digit, IIFL Capital and to Fairfax for many decades to come.”
