Synopsis: The shares of this private sector bank gained 5 percent after reports suggested the government is close to accepting Fairfax Financial’s $5.7 billion offer to acquire a controlling stake in the lender.
The share of this company, which is engaged in the business of Monetary intermediation of commercial banks, saving banks, postal savings banks, and discount houses, is in focus after the government stake sale news
With a market capitalization of Rs 93,019 crore, IDBI Bank Ltd’s share on Tuesday made a day high of Rs 88.40 per share, up by 5.1 percent from its previous day’s close price of Rs 84.10 per share. The share of the company gave a negative return of 12 percent over the last year.
Details of the Deal
India is close to accepting Fairfax Financial Holdings’ revised offer to acquire a 60.7 percent stake in IDBI Bank, according to a Bloomberg report. Fairfax, whose earlier bid did not meet the government’s reserve price, is now considering raising its offer by a few rupees per share. However, the exact revised offer price has not been disclosed.
The proposed stake sale is being carried out jointly by the Government of India and Life Insurance Corporation of India (LIC), which together own around 95 percent of IDBI Bank. If completed at the current market price, Fairfax’s acquisition of the 60.7 percent stake would be worth about $5.7 billion, making it one of the largest foreign investments in India’s banking sector.
The deal is yet to receive final approvals from the Union Cabinet and the Reserve Bank of India (RBI). The government has been trying to privatise IDBI Bank for several years as part of its disinvestment plan. Earlier this year, it scrapped the initial bids after they failed to meet the reserve price and has since been working to revive the sale process.
What does it mean for the bank?
If the transaction goes through, IDBI Bank will move into private ownership, with Fairfax Financial becoming the controlling shareholder through the acquisition of a 60.7 percent stake. The deal would mark a major step in the government’s long-running disinvestment programme and could bring fresh strategic direction, operational flexibility, and long-term capital support to the bank.
The acquisition would also be one of the largest foreign investments in India’s banking sector, highlighting growing global interest in the country’s financial industry. After recovering from years of high bad loans and returning to profitability, IDBI Bank could benefit from Fairfax’s long-term investment approach as it looks to strengthen its growth and expand its business.
About the Company
IDBI Bank Limited (Industrial Development Bank of India) is a prominent Indian financial services company headquartered in Mumbai. Established in 1964 as a Development Financial Institution, it transformed into a commercial bank in 2004. The Life Insurance Corporation of India (LIC) is the promoter of the bank and, along with the Government of India, holds around 95 percent of its equity.
Financial Highlight: Revenue from operations of Rs. 7,804 crore, compared to Rs. 6,983 crore in Q4 FY25, registering a 11.76 percent YoY growth. Net profit stood at Rs. 2,013 crore in Q4 FY26, compared to Rs. 2,094 crore in Q4 FY25, down 3.87 percent YoY. Earnings per share (EPS) declined 3.61 percent YoY to Rs. 1.87 in Q4 FY26, from Rs. 1.94 in Q4 FY25, while the financing margin improved to 14 percent in Q4 FY26 from 13 percent in Q4 FY25.
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