With Canada-based Fairfax Financial Holdings, founded by Indian-origin billionaire Prem Watsa, receiving Cabinet approval to acquire a controlling stake in IDBI Bank, the government has brought a long-pending strategic disinvestment process closer to completion. Initiated in 2022, the transaction signals that the government has not abandoned its disinvestment agenda despite delays in completing major sales. Valued at ₹52,878 crore, the deal involves the combined 60.72 percent stake held by the government and LIC. Following the sale, the government and LIC will retain stakes of 15 percent and 19 percent, respectively. The transaction remains subject to regulatory clearances.
This is a major strategic sale under the Modi government, following Air India and Neelachal Ispat Nigam, both acquired by Tata Group companies. The IDBI Bank transaction marks a change of control at an institution that had once teetered on the brink of collapse. Fairfax’s existing investments in India, including Bengaluru airport, CSB Bank and IIFL Capital Services, make it a significant choice of buyer. Its experience in the Indian financial sector could help steer the bank through its next phase of growth, though sustaining its recovery will be the real test.
IDBI Bank’s turnaround has been substantial. Government capital support of about ₹25,000 crore between 2010 and 2020 helped stabilise its finances. Its gross non-performing asset ratio fell from 31.78 percent in September 2018 to 2.32 percent in March 2026, while its capital adequacy ratio rose from 6.22 percent to 26.65 percent. The bank reported a record net profit of ₹9,513 crore in 2025-26. Its total business stood at ₹6.27 lakh crore on September 30, 2026, registering year-on-year growth of 18 percent. The challenge is to sustain this progress under private ownership while preserving depositor confidence.
The transaction should provide fresh momentum to the government’s disinvestment drive. Its 30.48 percent stake is expected to fetch about ₹26,540 crore, taking disinvestment and asset monetisation receipts beyond the Budget target of ₹80,000 crore for 2026-27, once the proceeds are realised. With nearly half the financial year still ahead, the total could exceed ₹1 lakh crore. But one large transaction cannot substitute for a consistent disinvestment policy. The government must advance other pending strategic sales and deploy public capital more efficiently. The IDBI Bank sale is a welcome boost; sustaining the momentum will be the real test.
