Athira Sethu
Kochi, 15 October 2026
DBI Bank stocks have fallen by more than 7% on October 15, Thursday, after approval of the sale of 60.72% stake in the bank to Fairfax Financial, which is a company based out of Canada.
The details of the stock market indicate that the stocks of IDBI Bank fell by 7.8% to ₹83.30 per share. The closing price of the share on the previous day was ₹90.39. About 48 million shares were traded on NSE and BSE.
This deal has been cleared by the Government after a meeting on October 14. The 60.72% stake in the bank will be purchased by Fairfax for about ₹52,878 crore. Shares worth 30.48% will be sold by Government of India, and LIC will sell its 30.24% shares.
Key Features of the Deal
According to the deal, the government and LIC will get the proceeds from the sale as per the shares sold by them. The ownership after the sale will be such that the government will have 15% stake in IDBI Bank and LIC will have 19% stake.
They will also withdraw their representation from the board and will remain ordinary shareholders.
Fairfax will pay a price of ₹81 per share. This is above the fair value estimated at ₹75.99 by two independent valuation firms. However, this deal will require all the required regulatory clearances. Fairfax will have to comply with the criteria laid down by Reserve Bank of India.
This deal was first announced in 2022 but had been shelved in March as the offers received were below expectations.
What Would be the Impact of the Deal on the Banking Industry?
According to the government, the deal will promote growth and competitiveness of IDBI Bank. Privatization might attract investment into the company, improve technology and management.
The bank might increase its lending activities and attract more funds from depositors without any financial assistance from the government.
The Finance Ministry announced that the deal might become the biggest foreign direct investment made into India’s banking industry. It might also attract further foreign investments and facilitate reform processes in the country.
In conclusion, the Fairfax deal will become an essential step for the reduction of government ownership in IDBI Bank. Even though the share price declined after the deal announcement, its impact on the company would depend on the further approval of the deal and the bank’s performance.
