Prem Watsa-led Fairfax set to deepen presence in India? Govt may sell IDBI Bank stake to Canadian firm

Prem Watsa-owned Fairfax Holdings may be set to deepen its presence in India's large banking sector with a report indicating that the government has finalised the sale of its stake in IDBI Bank to the Canadian firm.

According to a report in The Economic Times, the decision was taken after meetings with the finance ministry and Fairfax has raised its offer to ₹81 per share, compared with ₹75 it had offered last year. Fairfax has not officially commented on this so far. 

Emirates NBD, which has already acquired a 60 per cent stake in private sector lender RBL Bank, is said to have also been among the bidders for IDBI Bank.

IDBI Bank has neither confirmed nor denied the stake sale, saying that the proposed strategic disinvestment of the bank is being undertaken through a competitive bidding process in line with the disinvestment guidelines of the government.

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"IDBI Bank has had no role to play in the negotiations. The bank has not received any communication from Government of India regarding finalisation of any transaction under the ongoing strategic disinvestment process of the bank," it has said.

Fairfax already holds a 40 per cent stake in CSB Bank. Fairfax had acquired a majority stake in the Kerala based lender back 2018, the stake was later reduced in 2024. Fairfax has not commented on the report about its IDBI Bank bid.

Currently, the state-owned insurance giant Life Insurance Corp of India holds a 49.24 per cent stake in IDBI Bank. The government holds 45.48 per cent of the lender.

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The government is likely to sell a little over 30 per cent stake and LIC is also reportedly likely to sell around 30.2 per cent stake. Should it go through, the total deal size could be around $5.5 billion (₹53,000 crore), the report indicated.

Any potential deal will be assessed by the Reserve Bank of India and will also need clearance from the Competition Commission of India.

Also, given that Fairfax already holds a stake in CSB Bank, whether it decides to sell that or merge the two lenders is something that will have to be watched out for. 

The government had earlier in March 2026, put the stake sale on hold after over valuation issues.

IDBI Bank shares closed 2.9 per higher on Tuesday at ₹86.50 on the BSE.