Srinagar, Nov 12: Fairfax Financial Holdings’ Rs 52,878-crore acquisition of IDBI Bank, clinched with an offer that beat the government’s independent valuation benchmark, is set to pave the way for the Canadian investor to transform the lender into a diversified financial services powerhouse spanning banking, insurance, investment banking and wealth management, sources said.
Fairfax, led by billionaire investor Prem Watsa, offered Rs 81 per share of a 60.72 per cent controlling stake against the government’s benchmark valuation of Rs 75.99, in a global competitive bidding process, people with knowledge of the matter said.
The offer price represented a 56 per cent premium to IDBI Bank’s regulatory book value of Rs 51.85 per share as of March 31, 2026, excluding revaluation reserves and deferred tax assets. It was also about 15 per cent higher than the bank’s closing price of Rs 70.38 on May 18, the last trading day before final offers were invited, they said.
IDBI Bank shares on the stock market have, since the announcement of the bid, traded lower than the offer price as it moved towards the bank’s fundamental value as uncertainty surrounding the disinvestment eased, they added.
The disinvestment, people said, followed a global, transparent and competitive bidding process conducted by the government through its transaction adviser. All prospective bidders underwent a fit-and-proper assessment by the Reserve Bank of India, followed by detailed due diligence for those who qualified.
The policy framework for IDBI Bank’s disinvestment was outlined in the Union Budgets for 2016-17 and 2021-22, with the formal sale process commencing in October 2022. The move followed a prolonged period of financial stress at the lender, which remained under the RBI’s Prompt Corrective Action framework from May 2017 to March 2021 and required repeated capital infusions from the government and LIC.
Seeking to dispel questions over the role of Niti Aayog in the disinvestment, the people said the policy think tank had made no recommendation for the sale. IDBI Bank is a scheduled commercial bank, not a public sector undertaking, and Niti Aayog had only been asked to identify a list of PSUs.
Addressing allegations of a potential conflict of interest involving former Niti Aayog CEO Amitabh Kant, they said he was never part of any government panel that recommended the disinvestment. Kant left Niti Aayog in 2022 and joined Fairfax in 2025, three years later.
Reached for comments, Peter Clarke, President & Chief Operating Officer, Fairfax, said that, as a policy, Fairfax does not comment on any of its ongoing transactions.
“We are of the view that IDBI has the potential to be the finest universal Indian bank with global reach. This would help raise India’s credit-to-GDP ratio and transform the lives of ordinary citizens.”
The proposed acquisition will give Fairfax management control of IDBI Bank, while the government and Life Insurance Corporation of India (LIC) will retain a combined 34 per cent stake and participate in the lender’s future growth, the people cited earlier said.
Beyond acquiring control of the bank, Fairfax plans to bring its interests in Go Digit General Insurance, Go Digit Life Insurance and Fairfax India Holdings’ stake in IIFL Capital Services into IDBI Bank, creating an integrated financial services platform that could compete with established banking groups such as State Bank of India, ICICI Bank, HDFC Bank and Kotak Mahindra Bank.
The investor’s strategy is to leverage IDBI Bank’s banking franchise and customer base to cross-sell insurance, investment banking and wealth management products, broaden its revenue streams and strengthen its competitive position in India’s expanding financial services market.
