Canada's Fairfax buys majority stake in IDBI Bank for $5.56 billion

Canada's Fairfax Financial Holdings will buy a majority stake in India's IDBI Bank in a deal worth 528.78 billion Indian rupees ($5.56 billion), the Indian government said on Wednesday.

The acquisition, in the making for over ‌four years, will see Fairfax take control of IDBI Bank in India's biggest cross-border bank deal. Fairfax will offer 81 rupees per share for IDBI Bank above the benchmark price of 75.99 per share determined by the government based on fair valuations, Indian officials said in a statement.

Shares of IDBI Bank closed at 90.44 rupees per share, up 9% on the ‌day. The announcement came after the close of trade. INDIA SEEING RUSH OF FOREIGN INVESTMENTS

India's federal government and state-run Life Insurance Corp of India are selling ‌a combined 60.7% stake in IDBI Bank. They will retain a 34% stake after the transaction, and can sell their holdings in the open market as part of the agreement. The deal is subject to approvals from the Reserve Bank of India, the country's central bank and banking regulator.

Over the last two years, India has seen a rush of foreign investments in the financial sector, which is seeing strong demand ⁠for credit ​and low delinquencies. Last year, Emirates NBD said ⁠it was acquiring a stake in private lender RBL Bank for $3 billion.

Japan's Sumitomo Mitsui Banking Corporation also bought a 20% stake in Yes Bank, and MUFG acquired a 20% holding in non-bank lender Shriram ⁠Finance for $4.4 billion. LIMITED SUCCESS IN PRIVATISATION

India in 2021 announced a major programme to privatise most of its state-run companies, including in the four sectors it sees as sensitive, which include telecoms and ​banking. Since then, the sale of Air India to the Tata Group has been the Modi government's major success.

India in May privatised a smaller state-run ⁠firm, Indian Medicines Pharmaceutical Corp, and has sold indirect holdings in steel-maker Neelachal Ispat Nigam Ltd to Tata Steel, and Ferro Scrap Nigam to Konoike Transport Co. The plan to sell the IDBI stake was first announced ⁠in ​2022, but was shelved in March as bids fell short of the government's sale price expectation.

It was restarted after the government lowered its price expectations after accounting for a fall in IDBI's publicly traded price. The lender had total assets of 4.44 trillion rupees, or $46.66 billion, as of June 2026. It has business across retail and ⁠institutional segments, and more than 2,000 branches across the country.

It had a gross bad loan ratio of 2.3% as of June, down sharply from nearly 32% in ⁠September 2018. Fairfax has been a major investor ⁠in India through Fairfax India Holdings Corporation, which had assets worth $3.8 billion as of June 30, 2026. Its other investments include non-bank lender IIFL Capital and online brokerage firm 5paisa.

($1 = 95.1500 Indian rupees)