- Fairfax India Holding bought nearly $1 billion in Indian government bonds recently
- The purchase aims to bring capital into India before a potential IDBI Bank stake bid
- Fairfax was a bidder for IDBI Bank, where stake sale bids were below reserve price
Canadian investment holding firm Fairfax India Holding Corp has purchased Indian government bonds worth nearly $1 billion, Reuters reported, citing ources familiar with the matter.
The bond purchase is being viewed as a move to bring capital into India ahead of a possible bid to acquire stake in the IDBI Bank.
According to Reuters, the bond purchases were made last Friday through Fairfax India's local unit, with one source close to the company saying the transaction was aimed at bringing capital into India ahead of a potential deal to acquire a stake in IDBI Bank.
Fairfax India was among the bidders for the government-owned lender, where the strategic stake sale process has faced delays since March after potential buyers reportedly submitted bids below the government's reserve price.
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According to Reuters, India's recent move to exempt foreign investors in government bonds from capital gains tax helped make the investment attractive.
Four treasury officials told Reuters that Fairfax bought around Rs 60 billion ($633.7 million) of the 6.03% 2029 government bond issued in last Friday's auction, at a yield about five basis points below market levels.
The company is also believed to have purchased around Rs 6 billion of the 6.79% 2027 bond and Rs 26 billion of treasury bills maturing in 2027.
Fairfax is not a frequent participant in India's bond market. Financial disclosures showed the company held government securities worth $42.6 million at fair value as of December 2025.
The Indian government and Life Insurance Corporation of India together plan to sell a 60.7% stake in IDBI Bank as part of the broader privatisation programme.
The government currently owns 45.48% of the lender, while LIC holds 49.24%.
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