15 October 2026 Punjab Khabarnama Bureau : Shares of IDBI Bank fell nearly 7% on Thursday, October 15, 2026, after the Indian government approved the sale of a controlling stake in the lender to Canada-based Fairfax Financial Holdings for approximately $5.56 billion. The decline came after the bank’s shares had rallied in the previous trading session ahead of the announcement, prompting investors to book profits.
The Cabinet Committee on Economic Affairs approved the strategic sale of a 60.72% stake in IDBI Bank for ₹52,878 crore. The transaction involves the combined shareholdings of the Government of India and the Life Insurance Corporation of India (LIC), marking a major change in ownership for the lender.
Why Did IDBI Bank Shares Fall?
IDBI Bank shares declined after the government announced the deal because Fairfax’s agreed purchase price was lower than the stock’s prevailing market price. Fairfax will pay ₹81 per share, while IDBI Bank had closed at ₹90.44 on Wednesday, October 14. This represented a discount of approximately 10.4% to the previous closing price.
The stock had gained around 9% in the previous session amid expectations surrounding the stake sale. After the official announcement, some investors chose to book profits, contributing to the decline.
Market analysts said the fall could reflect short-term profit-taking rather than a negative assessment of the transaction itself. However, the difference between the acquisition price and the market price remains an important factor for investors evaluating the deal.
Details of the $5.5 Billion Stake Sale
Under the approved transaction, the government will sell 30.48% of IDBI Bank, while LIC will sell 30.24%. Together, the two shareholders will transfer 60.72% of the bank’s equity to Fairfax, giving the Canadian investment group controlling ownership.
The government currently holds 45.48% of IDBI Bank, while LIC owns 49.24%. Following completion of the transaction, the government’s stake will fall to 15%, and LIC’s holding will decline to 19%. Their combined ownership will therefore be reduced to 34%.
The transaction is expected to become India’s largest foreign direct investment in the financial sector. It also marks a significant step in the government’s long-running effort to reduce its ownership in the lender and bring in a strategic private investor.
Why Fairfax Is Acquiring IDBI Bank
Fairfax Financial Holdings is an international insurance and investment group led by Indian-Canadian businessman Prem Watsa. The acquisition will give Fairfax control of a major Indian banking business with a broad retail and institutional customer base.