IDBI Bank Shares Drop Nearly 7% After Fairfax Stake Sale

IDBI Bank tumbled nearly 7% in early trade on Thursday after the Union Cabinet approved the sale of a 60.72% stake in the lender to a Fairfax Financial Holdings entity for ₹52,878 crore. The deal, cleared by the Cabinet Committee on Economic Affairs on Wednesday, values the shares at ₹81 each—more than 10% below the previous closing price of around ₹90.40. The stock had risen sharply the day before on expectations of the announcement. Under the transaction, the government will sell its 30.48% holding and Life Insurance Corporation of India (LIC) will divest 30.24%. After the sale, the Centre will retain 15% and LIC 19%, leaving them with a combined 34% stake. Officials described the deal as the largest foreign direct investment in India’s financial sector. Fairfax’s bid of ₹81 per share exceeded the government’s benchmark price of ₹75.99 and was accepted after a competitive process. The share purchase agreement is expected to be signed before the end of 2026, subject to regulatory approvals.