IDBI Bank News: Cabinet Approves ₹52,878 Crore Stake Sale to Fairfax

14 Oct 2026 , 05:18 PM

Shares of IDBI Bank closed 8.98% higher at ₹90.39 on Wednesday and now the Union Cabinet has approved the sale of a 60.72 percent stake in the bank to Fairfax Financial Holdings’ subsidiary, M/s 10955230 Canada Inc., for ₹52,878.08 crore.

The banking shares opened at ₹84.8, and hit a high of ₹93.6 during the day, compared to the previous close of ₹82.94 on the NSE.

The proposed transaction is a key step towards the government’s exit from its stake in IDBI Bank, but the deal still needs to clear certain regulatory and transactional hurdles before it can be finalised.

IDBI Bank Share Price Key Levels

Particulars	Details
Previous close	₹82.94
Opening price	₹84.80
Intraday high	₹93.60
Intraday low	₹84.33
Closing price	₹90.39
Change	+8.98%

Cabinet approves 60.72% stake sale to Fairfax

The Union Cabinet approved the sale of a 60.72% stakes in IDBI Bank to Fairfax for ₹52,878.08 crore. Union Minister Ashwini Vaishnaw said that, upon execution, the transaction will be the biggest foreign direct investment in India’s financial sector. Fairfax’s winning bid of ₹81 per share comes at a time when the bank’s shares have struggled to rise above the ₹75.99 mark. The previous bidding round, which was not approved by the government, had seen bidders offering below the ₹94.42 crore reserve price per share. The transaction is in line with the government’s divestment plans for IDBI Bank. The government will retain a 15% stake following the sale.

The Cabinet Committee on Economic Affairs has approved the divestment of this portion through the open market in accordance with the applicable procedure. LIC will dispose of its portion in accordance with its internal procedure and applicable laws and regulations.

RBI approval and other conditions

The Cabinet approval is a significant step, but it is not the final step in the process. The winning bidder must submit its credentials to the Reserve Bank of India (RBI) and provide a roadmap for fulfilling the central bank’s conditions before the deal can be finalised. The transaction will be subject to the necessary approvals and formalities.

As far as investors are concerned, the difference between the proposed deal and the actual execution of the deal is of utmost importance.

State Bank of India: Financials and Valuation

IDBI Bank’s financial turnaround is an important aspect to consider in relation to the proposed sale.

The bank’s gross non-performing asset (NPA) ratio decreased significantly from 31.78% as of September 2018 to 2.32% as of March 2026.

Net NPAs declined from 17.30% to 0.15% over the same period.

IDBI’s capital adequacy ratio (CAR) improved from 6.22% as of 2018 to 26.65% as of March 2026. This provides the bank with a substantial buffer against potential losses.

The bank’s net profit for FY26 was ₹9,513 crore, and its total business as of September 30, 2026, stood at ₹6,27,149 crore, representing an 18% year-over-year increase.

These figures highlight the significant turnaround in the bank’s financial performance and asset quality over the past few years.

What Does the Fairfax Deal Mean for IDBI Bank?

The proposed deal with Fairfax could have a significant impact on the future of IDBI Bank. The change in majority ownership will have a decisive bearing on the future course of action of the bank, its capital-raising efforts and its plans for expansion, even though the outcome of the deal will ultimately depend on the final terms and execution of the transaction.

The jump in the bank’s share price following the announcement of the Cabinet’s approval is a positive sign for investors, but it is important to remember that the bid price of ₹81 per share is not indicative of the share price or the final outcome of the deal.

Investors are likely to be watching the situation closely as it unfolds.

Disclaimer – The stock/s and indices mentioned in this article are discussed solely for informational and educational purposes. It should not be construed as investment advice or a recommendation to buy or sell any securities. The views and investment recommendations mentioned in the article are reported by investment experts, analysts, broking houses, rating agencies and other market professionals in their own capability and do not represent the views of Indiainfoline/IIFL Capital website or its management. Investors should conduct their own research or consult a financial advisor before making any investment decisions. Investments in securities markets are subject to market risks. Read all the related documents carefully before investing.