IDBI Bank Privatisation: Cabinet Approves Fairfax Bid at ₹81 a Share for 60.72% Stake

After five years of trying, the government has picked a buyer for IDBI Bank. On Wednesday, 14 October 2026, the Cabinet Committee on Economic Affairs (CCEA) approved 10955230 Canada Inc., whose parent is Fairfax Financial Holdings, as the strategic buyer for 60.72% of the bank. The price is ₹52,878.08 crore, or ₹81 a share. IDBI Bank privatisation is not complete yet: Fairfax still needs the Reserve Bank of India’s clearance, a share purchase agreement has to be signed, and minority shareholders will get an open offer. Here is where things stand, verified against the government’s own releases, and what it means if you bank with IDBI or hold its shares.

IDBI Bank privatisation: what the Cabinet approved

Source: Ministry of Finance release and FAQs on PIB, 14 October 2026, 4:50 PM. Proceeds are split in proportion to the stakes sold; by our calculation that is about ₹26,544 crore for the government and ₹26,335 crore for LIC.

How the price was decided

The government’s release explains why the deal closed at ₹81 when an earlier reserve price was ₹94.42:

• First round failed. Bids were invited on 8 January 2026, when IDBI’s share price was ₹108.12. The bids, discovered at ₹75 a share, fell short of the ₹94.42 reserve price and were not approved.
• Final-round offers invited. Qualified bidders were asked to submit “best-offer” bids on 18 May 2026, when the share traded at ₹70.38.
• Market price disregarded. The government said the “narrowly traded” stock swung between ₹61.01 and ₹118.38 during the valuation period, so two independent agencies valued the bank using a market-multiple method and an asset-valuation method, based on 31 March 2026 accounts.
• Result. The average fair value was ₹75.99. The ₹81 bid is about 6.6% above that, and above both agencies’ separate estimates, so it was judged reasonable.

Before the expression of interest in October 2022, the share was at ₹42.40, the release notes. Five parties showed interest, four qualified, and two submitted final bids.

What still has to happen

1. RBI “fit and proper” step. The buyer must present its credentials to the RBI in line with the fit-and-proper assessment done at the expression-of-interest stage, and submit a roadmap to meet the regulatory conditions set then (PIB release).
2. Share purchase agreement. DIPAM Secretary Arunish Chawla told CNBC-TV18 that the agreement will be signed after the RBI step.
3. Open offer to minority shareholders. Under SEBI’s takeover rules, a change of control triggers an open offer. Mr Chawla said public shareholders hold about 5.3%; our check of the pre-deal holdings (government 45.48%, LIC 49.24%) gives 5.28%.
4. Other approvals. The Financial Express reports that Competition Commission clearance is also needed.
5. Closing. The government expects completion by the end of 2026-27, that is, by March 2027.

Until these steps are done, ownership has not changed. IDBI Bank continues to run as it does today.

What it means for depositors

If you have a savings account, FD or locker with IDBI Bank, nothing changes because of this approval. Some points to keep in mind:

• Same bank, same regulator. IDBI Bank is a scheduled commercial bank regulated by the RBI, and that will not change with the owner. The RBI already classifies it as a private sector bank.
• Deposit insurance stays. Deposits are insured by DICGC up to ₹5 lakh per depositor per bank, as at any insured bank. See our DICGC guide.
• Your FD rate is locked. Existing fixed deposits run at the contracted rate until maturity. A new owner may change rates on new deposits later, as any bank can.
• Account details unchanged. Account numbers, IFSC codes, cheques and cards continue. Ignore any call or message asking you to “re-verify” your account because of the sale; that is a common fraud script.

The government’s FAQ says a privately run IDBI should be able to raise funds without government help and could bring “new technology and better management practices”. Whether service improves is something customers will judge over time.

What it means for IDBI shareholders

The stock reacted sharply. It rose about 9% on 14 October before the announcement and closed at ₹90.39. On Thursday, 15 October, it fell 7.68% to ₹83.45 on NSE, still 3.02% above the ₹81 deal price (our calculation from NSE closing prices as reported).

Sources: PIB release (first six rows); NSE closing price as reported by The Hindu and market data sites.

Three things to watch if you hold the shares:

• Open offer price. It will be set under SEBI’s takeover regulations and may not be ₹81. Wait for the public announcement and the letter of offer before deciding.
• Free float. The government plans to sell its residual 15% in the market over time, and LIC has been asked by regulators to cut its 19% to 15% within two years of closing, Mr Chawla said. More shares in the market can affect the price.
• Ownership glide path. RBI rules limit how much a promoter can hold in a private bank over the long run. The roadmap Fairfax submits to the RBI will show how it plans to meet those limits.

This is not a recommendation to buy, hold or sell. Stocks tied to deal news can move sharply both ways.

A short history

For other banking changes this month, see our RBI policy report. If you plan to move money between banks, read FD premature withdrawal rules first; there is no need to break deposits because of this deal.

Quick answers to the most common questions follow.

FAQs

Has IDBI Bank been privatised?

Not yet. The Cabinet has approved the buyer and price. RBI clearance, the share purchase agreement and an open offer must follow, with closing expected by March 2027.

Is my money in IDBI Bank safe?

The deal does not affect your deposits. IDBI remains RBI-regulated, and deposits are insured up to ₹5 lakh per depositor by DICGC.

Who is buying IDBI Bank?

10955230 Canada Inc., whose parent entity is Fairfax Financial Holdings, led by Prem Watsa.

Will IDBI shareholders get ₹81?

Only the government and LIC sell at ₹81. Public shareholders will get an open offer at a price set under SEBI’s rules.

Takeaway: IDBI Bank privatisation has cleared its biggest hurdle, with Fairfax approved to buy 60.72% at ₹81 a share, but RBI clearance and an open offer come next. Depositors need to do nothing; shareholders should wait for the open-offer terms.