- Government approved sale of controlling stake in IDBI Bank to Fairfax for Rs 52,878 crore
- Fairfax's bid of Rs 81/share was above the Rs 75.99 benchmark price set by independent valuations
- Government and LIC will retain 34% combined; Fairfax must merge CSB Bank within two years
The government on Wednesday approved the sale of a controlling stake in IDBI Bank to Fairfax for Rs 52,878 crore. That is more than what Prem Watsa's dedicated India investment vehicle is worth on paper.
Fairfax India Holdings Corporation reported total assets of $3.76 billion as of June 30, 2026, with total equity of $2.94 billion. At the current exchange rate, the IDBI cheque works out to about $5.6 billion.
Fairfax's winning bid of Rs 81 a share cleared a benchmark price of Rs 75.99, which was fixed on the basis of two independent valuations. The government said the bid was above the benchmark and reasonable.
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The deal comes after an earlier round fell apart. Initial bids were rejected for failing to meet the Rs 94.42-a-share reserve price, and the government then reworked its valuation using market-multiple and asset-based methods, citing volatility in the stock.
The government and LIC will retain a combined 34% in the restructured entity. The government's residual 15% will be sold in the open market, and LIC is free to manage its 19% independently. The transaction still needs RBI's fit-and-proper assessment and other regulatory clearances. The government has also said Fairfax must merge CSB Bank, the smaller lender it already controls, within two years.
Who Is Prem Watsa
Watsa was born in Hyderabad. An IIT graduate, he is often called the Warren Buffett of Canada. He set up his own asset management firm, Hamblin Watsa Investment Counsel, in 1984. He has been chairman and CEO of Fairfax Financial Holdings since 1985, and in 1987 renamed the company Fairfax, short for “fair, friendly acquisitions”.
Presently, Fairfax ranks among the world's 20 largest property and casualty insurers. The group reported total assets of $109.1 billion at June 30, 2026.
The India Portfolio
Fairfax's large-scale India push began with travel. Its first major acquisition was a 77% interest in Thomas Cook India, later reduced to 68%. As of March 31, 2026, the promoter held 63.83% of the company.
In January 2015, following Narendra Modi's election, Fairfax launched Fairfax India Holdings Corporation, raising about $1 billion for long-term investments in India.
The largest asset in that vehicle is Bengaluru's airport. After buying an additional 10% from Siemens for $255 million, Fairfax India's stake in Bangalore International Airport Ltd rose to 74% from 64%. The Airports Authority of India and Karnataka's state industrial development corporation hold 13% each. BIAL's concession with the Government of India runs until 2068.
In banking, Fairfax was a first-mover. RBI cleared it in 2018 to acquire up to 51% of CSB Bank, making CSB the first Indian bank to come under majority ownership of a foreign investor. It paid Rs 140 a share. In June 2024, it sold 9.7% to comply with regulatory norms, reducing its stake to 40% from 49.72%.
In capital markets, Fairfax India agreed in May to raise its stake in IIFL Capital Services to 51% with a $211 million investment. In general insurance, FAL Corporation, a Fairfax-linked entity, will hold 57.28% of Go Digit General Insurance after a CCI-approved merger.
Fairfax has also been selling. In April, it sold its entire equity interest in Sanmar Chemical Enterprises for Rs 248 crore.
How IDBI Compares
IDBI is in a different league from what Fairfax-run CSB Bank operates in India. The bank reported record net profit of Rs 9,513 crore for FY26, up 27%, and total business of Rs 6,00,789 crore. It operates 2,174 branches and 3,011 ATMs.
By comparison, CSB Bank's business is around Rs 86,282 crore, as of the quarter ended June 2026. For FY26, the bank logged a net profit of Rs 1,085 crore, up 19%. The lender operated 862 branches and 832 ATMs/CRMs.
Notably, IDBI witnessed a restructuring earlier as well. The lender was reclassified as a private sector bank in 2019 after LIC bought a controlling 51% stake for Rs 21,624 crore. Seven years on, it is set to get its first private promoter.
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